The Union Budget for 2020-21, to boost income and enhance their purchasing power.

Indian Budget Highlights

Fiscal numbers:

  • FY20 fiscal deficit revised to 3.8% from 3.3% in the current fiscal. For FY21, fiscal target seen at 3.5%..
  • Net market borrowing for FY20 at Rs 4.99 lakh crore; For FY21 it’s pegged at Rs 5.36 lakh crore.
  • Nominal GDP growth for 2020-21 estimated at 10%.
  • Receipts for 2020-21 estimated at Rs 22.46 lakh crore. Expenditure at Rs 30.42 lakh crore.

Tax:

A new tax regime has been announced. Those who want to be in the old regime with exemptions can continue to pay at the old rates.

Income Tax
Between  Rs.5 Lakh and Rs.7.5 Lakh Reduced to 10% from the current 20%
Between  Rs.7.5 Lakh and Rs.10 Lakh Reduced to 15% from the current 20%
Between  Rs.10 Lakh and Rs.12.5 Lakh Reduced to 20% from the current 30%
Between  Rs.12.5 Lakh and Rs.15 Lakh Reduced to 25% from the current 30%
Above Rs.15 Lakh Continue at 30%, but without exemptions

 

  • Over 70 deductions have been removed
  • Companies will no longer be required to pay Dividend Distribution Tax (DDT).
  • Concessional corporate tax rate of 15 per cent to new domestic companies in manufacturing and power sector.

 

Economy and Finance:

  • Bank deposit insurance coverhad been increased from ₹1 lakh to ₹5 lakh per depositor.
  • Government to sell part of its stake in LIC via public offering.
  • Proposal to sell balance holding of government in IDBI Bank.
  • Few PSBs to be encouraged to approach the capital market to raise additional capital.
  • Tax on cooperative societies reduced to 22% without exemptions.
  • FPI limit in corporate bonds raised to 15% from 9%.

 

Agriculture, Irrigation and Rural Development:

  • Rs 2.83 lakh crore to be allocated for the 16 Action Points; Rs 1.6 lakh crore allocated to agriculture and irrigation; Rs 1.23 lakh crore for Rural development and Panchayti Raj.
  • Milk Production Capacity to be expanded 108T from 53.5T.
  • Fish production capacity to increase to 200 Lakh Tonnes by 2022-2023
  • Doubling farmers’ incomes by 2020
  • Agri-credit availability set at ₹15 lakh crore for 2020-21.
  • Comprehensive measures for 100 water stressed districts.
  • Provide 20 lakh farmers to set up standalone solar pumps. Help another 15 lakh farmers to solarise their power grid.
  • Village storage scheme proposed to be run by women SHGs.
  • Indian Railways to have refrigerated coaches capability in ‘kissan trains’ to carry perishables and milk.
  • Krishi UDAN on international and national routes.

 

Health and Sanitation:

  • An allocation of ₹69,000 crore for the health sector.
  • ₹12,300 crore for Swachh Bharat this year.
  • Proposal to set up hospitals in Tier-II and Tier-III cities with the private sector using PPP.
  • Expand Jan Aushadhi scheme to provide for all hospitals under Ayushmann Bharat by 2025.

Transport Infrastructure:

  • Budget proposes to provide ₹1.7 lakh crore for transport infrastructure in 2021.
  • National Logistics Policy to be released soon.
  • Chennai-Bengaluru Expressway to be started.
  • Aim to achieve electrification of 27000 km of lines.
  • Plan to have a large solar power capacity for Indian Railways.
  • The government also proposes a Bengaluru suburban rail project at a cost of ₹18,600 crore.
  • Govt to monetise 12 lots of national highways by 2024.
  • 100 more airports will be developed by 2024 to support UDAN.

Education:

  • Allocation₹99,300 crore for education sector in 2021 and about ₹3,000 crore for skill development.
  • Urban local bodies to provide internship to young engineers for a year.
  • Degree-level full-fledged online education programmes by institutions ranked in top 100 in NIRF rankings, especially to benefit underprivileged students.
  • A national police university and a national forensic science university is proposed to be setup.
  • IND SAT exam for students of Asia and Africa to promote “study in India” programme.

Power and Energy:

  • 22, 000 crore proposed for power and renewable energy sector in 2020-21.
  • Expansion of national gas grid from the present 16200 km to 27000 km proposed.
  • Further reforms to facilitate transparent price discovery and ease of transactions.
  • Expansion of National Gas Grid from 16,200 km to 27,000 km along with reforms to deepen gas markets, enable ease of transactions and transparent price discovery.

Housing:

  • Tax holiday for affordable housing extended by 1 year. Additional deduction up to Rs. 1.5 lakhs for interest paid on loans taken for an affordable house extended till 31st March, 2021.

 

Telecom:

  • Rs 6,000 crore for BharatNet programme; Fibre to Home connections under BharatNet will be provided to 1 lakh gram panchayats this year itself.
  • New policy for private sector to build Data Centre Parks.

Indirect Taxes:

  • Customs duty raised on footwear to 35% from 25% and on furniture goods to 25% from 20%.
  • Excise duty proposed to be raised on Cigarettes and other tobacco products.
  • Basic customs duty on imports of news print and light-weight coated paper reduced from 10% to 5%.
  • Customs duty rates revised on electric vehicles and parts of mobiles.
  • 5% health cess to be imposed on the imports of medical devices, except those exempt from BCD.
  • Lower customs duty on certain inputs and raw materials like fuse, chemicals, and plastics.
  • Higher customs duty on certain goods like auto-parts, chemicals, etc. which are also being made domestically.

Tax concession for foreign investments:

  • 100% tax exemption to the interest, dividend and capital gains income on investment made in infrastructure and priority sectors before 31st March, 2024 with a minimum lock-in period of 3 years by the Sovereign Wealth Fund of foreign governments.

 


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