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Union Budget 2020: Big Reduction In Tax Rates, Boost To Agriculture And Many More

Bhubaneswar: Finance Minister Nirmala Sitharaman on Saturday presented full-year budget for the year ending March 2021. This was the second budget for Sitharaman in  the second term of the Narendra Modi government.

Here are the KEY HIGHLIGHTS:

  •  Budget Speech: Nirmala Sitharaman says customs duty raised on footwear and furniture
  • Health cess on import of medical equipment imposed in Budget
  • FM raises excise duty by way of national calamity contingent duty on cigarettes, tobacco products
  • Anti-dumpting duty on purified terephthalic acid (PTA) abolished
  • Customs duty exemption on raw sugar, agro-animal based products, Tuna bait, skimmed milk, certain alcoholic beverages, soya fibre, soya protein withdrawn
  • Customs duty on tableware/kitchenware made of porcelain or China ceramic, clay iron, steel, copper doubled to 20%
  • Customs duty on catalytic converters, parts of commercial vehicles, other than EVs, hiked
  • Rs 12.7 lakh crore rupees to be transferred to states and union territories in 2020-21
  • Rs 69,000 crore provided for Health Care in Union Budget 2020-21
  • Jan Aushadhi Kendra Scheme to be Expanded to all Districts by 2024
  • Income tax rates will be significantly reduced for those who forego reliefs, exemptions
  • Those earning upto Rs 5 lakh annually will pay no tax
  • For income between Rs 7.5 lakh and Rs 10 lakh per annum , tax rate reduced to 15 pc from 20 pc

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  • New income tax rates will be optional
  • A person earning Rs 15 lakh per anum and not availing any deductions will pay Rs 1.95 lakh tax in place of Rs 2.73 lakh
  • The new personal income tax regime entails an estimated revenue foregone amounting to 40,000 crore rupees per year
  • Tax rate of 30% on income above Rs 15 lakh will be continued
  • 70 of more than 100 income tax deductions and exemptions have been removed to simplify tax system and lower tax rates
  • Dividend Distribution Tax shifted to individuals instead of companies
  • Concessional tax rate of 15 pc extended to power generation companies
  • Concessional withholding rate of 5 pc on interest payment to non-residents extended up to June 30, 2022
  • Budget proposes deferment of tax payment by employees on ESOPs from startups by five years
  • Tax on Cooperative societies proposed to be reduced to 22 per cent plus surcharge and cess, as against 30 per cent at present
  • Date of approval of affordable housing projects for availing tax holiday on profit earned by developers extended by 1 year
  • Govt extends additional Rs 1.5 lakh tax benefit on interest paid on affordable housing loans to March 2021
  • Scheme proposed to bring down litigation in direct taxation scheme
  • ‘Vivad se Vishwas’ scheme for direct tax payers whose appeals are pending at various forum
  • Govt to further ease process of allotment of PAN. System for instant allotment of PAN on basis of Aadhaar to launched
  • Aadhaar-based verification of taxpayers to be introduced
  • Registration of charity institutions to be made completely electronic, donations made to be pre-filled in IT return form to claim exemptions for donations easily
  • Receipts for 2020-21 pegged at Rs 22.46 lakh crore expenditure Rs 30.42 lakh crore
  • Fiscal deficit pegged at 3.8 pc in current fiscal and 3.5 pc in next year
  • GIFT City to have an International Bullion Exchange
  • Net market borrowings would be Rs 4.99 lakh cr in FY 20; Rs 5.36 lakh cr in next fiscal
  • Government proposes to sell a part of its holding in LIC by initial public offer
  • Mechanism will be made to address liquidity constraints of NBFCs and Hosue finance corporations.
  • Govt to offer support by guaranteeing securities floated to provide liquidity for NBFCs
  • Nirmala Sitharaman terms GST as historic structural reform and it integrated country economically
  • GST resulted in Rs 1 lakh crore gains to consumers, removed inspector raj and helped transport sector: FM
  • Simplified return for GST is being introduced from April 2020
  • Central government’s debt has come down to 48.7% in March 2019 from 52.2% in March 2014
  • 7.4 pc growth surpassed in 2014-19 with average inflation of 4.5 pc
  • India uplifted 271 million people out of poverty
  • 6.11 crore farmers insured under Pradhan Mantri Fasal Bima Yojna
  • 16-point action plan proposed to boost agriculture and farmers welfare
  • 20 lakh farmers to get funds for setting up standalone solar pumps
  • Govt proposes comprehensive measures for 100 water stressed districts
  • States asked to adopt 3 central model laws on agri land leasing, marketing & contract farming
  • Indian Railways will set up Kisan Rail through PPP model for quick transportation of perishable goods
  • Krishi Udaan will be launched by MoCA on international and national routes.
  • NABARD will map and geo-tab 162 mn tonne capacity agri warehouses across country
  • FCI and Warehousing Corporation of India to build warehousing facility on their land
  • NABARD refinance scheme to be expanded, Fish production to be raised to 200 lakh tonnes by 2022
  • Rs 1.23 lakh allocated for rural development and panchayati raj, Rs 1.6 lakh crore for agriculture and allied activities
  • Proceeds from taxes on medical devices would be used to support setting up of hospitals
  • Allocation of Rs 12,300 crores for Swachh Bharat Mission for year 2020-21
  • Govt proposes Rs 3.6 lakh crore towards piped water supply to households
  • Centre to announce new education policy soon, over 2 lakh suggestions received
  • Steps to be taken to attract external commercial borrowing, FDI in education sector
  • National Police University and National Forensic University proposed
  • Rs 99,300 crore allocated for education sector, Rs 3,000 crore for skill development
  • Youth and fishery extension work to be enabled by rural youth as Sagar Mitras, forming 500 fish farmer producing organizations
  • India needs to boost domestic manufacturing and attract investment in electronic manufacturing
  • Milk processing capacity to be doubled by 2025
  • Scheme proposed for manufacturing of cell phones, semi conductors and other electronic devices
  • National Technical Textile mission with an outlay of Rs 1,480 crore over 4 years to cut down imports
  • Rs 27,300 crore provided for development and promotion of industry and commerce
  • Digital refund of duties and taxes of Centre, states and local bodies to exporters from this year
  • 1,150 trains to run in PPP mode, 4 stations to be redeveloped with help of private sector, more Tejas type trains to connect tourist destinations
  • 100 more airports to be developed by 2024 to support Udaan scheme
  • Rs 1.7 lakh cr provided for transport infrastructure in 2020-21
  • Conventional electricity meters will be replaced with prepaid smart meters in 3 years
  • Rs 22,000 crore to Power and Renewable Energy sector in 2020-21
  • Rs 8,000 cr outlay provided for National Mission on Quantum Technology and Application over 5 years
  • Rs 35,600 crores for nutrition related programmes for 2020-21
  • Rs 3.6 lakh crore approved for Jal Jeevan Mission
  • Policy to enable private sector to build Data Centre Parks in the country
  • National Gas Grid to be expanded from 16,200 km to 27,000 km
  • Task force to recommend marriageable age for women
  • Rs 9,500 crore provided for senior citizens and Divyangs
  • Rs 85,000 crore allocated for SCs and OBCs, Rs 53,700 crore for Scheduled Tribes in Budget for FY 2020-21
  • 28,600 crore rupees provided for programmes which are specific to women
  • Rs 2500 crores for promotion of tourism, Rs 3,150 crore for ministry of culture in the year 2020-21
  • Tribal museum proposed in Ranchi, Jharkhand
  • 5 archaeological sites to be developed as iconic sites with on-site museums -Rakhigarhi, Hastinapur, Shivsagar, Dholavira and Adichanallur
  • Indian Institute of Heritage and Culture to be established under Ministry of Culture
  • India’s commitment for tackling climate change made in Paris conference kick starts from January 1, 2021
  • Rs 4,400 crore allocated for States that work towards clean air
  • Power plants with emissions above prescribed limits to be shut
  • Govt proposes amendments in Companies Act to decriminalise civil offences
  • Taxpayer charter to be instituted in the charter, a part of our statutes. Committed to take measures to ensure citizens are free of tax harassment
  • Major reform in recruitment of non-gazetted staff proposed. National Recruitment Agency to be set up for conducting common online eligibility tests for recruitment to these posts
  • National Policy on statistics to be brought in
  • Allocation of Rs 30,757 crores for 2020-21 for Jammu and Kashmir,  Rs 5,958 crores for Ladakh
  • Rs 100 crore allocated for hosting G-20 Summit
  • Rs 3.50 lakh cr infused as capital in public sector banks in past years
  • Deposit insurance for depositors increased to Rs 5 lakh from Rs 1 lakh
  • Balance govt holding in IDBI banks to be sold to pvt retail investors
  • Amendments to facilitate separation of govt pension trust from PFRDA proposed
  • RBI to extend Debt restructuring window for MSME by a year to March 31, 2021
  • Investment limit of FPIs in corporate bonds raised from 9 pc to 15 pc
  • Rs 2.83 lakh crore for agri and allied activities
  • Special bridge courses to be designed for teachers, nurses, para medical staff, caregivers
  • Fundamentals of economy strong, inflation well contained, banks cleaned up accumulated loans: FM
  • FM says Budget is for boosting income, purchasing power of people
  •  Union Cabinet approves Budget 2020
  • The printed copies of the Union Budget were checked by a sniffer dog as part of a security check ahead of the presentation of Budget at 11 am.

Before presenting the Union Budget 2020-21, Sitharaman called on the President of India, Ram Nath Kovind and later proceeded to Parliament House for a crucial Cabinet meeting which began at 10:15 AM.

The pre-Budget Economic Survey for 2019-20, which projected the state of the economy and outlined its challenges was released yesterday.

Sitharaman had presented her maiden budget in July last year after the BJP-led government returned to power in the crucial 2019 elections.

(With Agency Inputs)

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