Budget Highlight 2020

60 lakhs new taxpayers added via GST introduction

New simplified GST returns from April 2020

FDI elevated during period 2014-2019 to $284bn

Central government debt reduced to 48.7% of GDP in 2019

16 points action plan for agricultural & irrigation sector under aspirational India

New Education Policy will be announced soon

ECB and FDI will open in education sector

Degree level full fledged online programs to be started National Police University & Forensic university is proposed to be set up

INR 99,300 cr proposed for education sector

Investment clearance cell to be set up to facilitate investments and to provide advisory at State as well as Centre level5 new smart cities to be developed

Move to develop each district an export hub

INR 27,300 cr for promotion of industry & commerce

National logistics policy to be released soon

Digital refund of duties to exporter

Setting up of solar panels on barren lands

More Tejas types train to be introduced to connect iconic cities

100 more Airports to be developed by 2024

Proposed to states to replace old electric meters to the smart pre-paid electric meters. This will give flexibility to consumer to choose service provider.

INR 22,000 cr proposed for power & renewal energy sectorPrivate sectors to built data centre parks throughout the country, policy may come soon

INR 6,000 cr proposed for ‘Bharat Net’

Funding for ideation and start up

INR 28,600 cr proposed in this budget specific to women

Proposed to set up Indian Institute of Heritage & culture as a deemed university

5 Archeological sites would be developed as iconic sites with onsite museums

Setting up of Tribal Museum in Ranchi, Jharkhand

INR 2,500 cr proposed for development of Tourism sector

Taxpayer’s charter to be a part of statute to build confidence/trust

Government will ensure that citizens need not worry about tax harassment. There is a debate on building criminal liabilites for civil acts. Companies Act will be amended to correct this

Robust mechanism is in place to monitor health of all scheduled banks

Insurance cover for deposits increased from INR 1 lakh to 5 lakh

Universal pension coverage with auto enrollment to be introduced (through PFRDI) to every person

Invoice financing by NBFCs to MSME sector – Amendments to be made in Factoring Act

Certain amendments to be made in SARFESI Act

Non residents can invest in certain Government securities

Liquidity constraints of NBFCs & HFCs will be addressed – Government has taken steps from last year

International Buillion exchange to be setup in GIFT IFSC

LIC initial public offer will come to list on stock exchange; Government will sell part of its holding

Tax Proposals

Personal income tax – proposed to bring new income-tax regime for individual Taxpayer’s
New slab rate (without exemption)
10% – income 5 – 7.5 lakhs
15% – 7.5 – 10 lakhs
20% – 10 – 12.5 lakhs
25% – 12.5 – 15 lakhs
30% – Above 15 lakhs
Income upto 5 lakhs no taxif individual ears income of 15 lakhs then tax would be 1.95 lakh vis-a-vis 2.73 lakhs as earlier

New scheme of individual tax rates is optional

FM says – reviewed all existing income tax exemptions and removed 70 of them in new regime and will review remaining and rationalize

Propose to remove DDT and dividend would be taxable in the hands of shareholders; removal of cascading effect of dividend distributed by holding to subsidiary (25k cr revenues forgone on account of DDT abolishion)

Concessional tax rate for electricity/power generation companies

100% tax exemption on new investment by foreign funds in infrastructure sector by 2024 with a minimum lock in period of 3 years

ESOPs given by startups to employees currently taxed as perquisites; deffering of tax payment by employees to 5 years

Increase in turnover limit from 25 cr to 100 cr for startups

Deduction can be claimed by startups upto 10 years

Tax audit turnover threshold limit increased from 1

Concessional 5% withholding tax has been extended to municipal bonds. Cooperatives are taxed at 30 percent now. Cooperatives can choose a 22 percent tax with 10 percent surcharge and 4 percent cess with no exemptions.

Complete online registration of charitable institutions

Faceless appeals on the line of faceless assessment

Vivad se Vishwas Scheme introduced – New direct tax dispute settlement scheme

More than 4.83 lakhs cases pending at various forums

Taxpayer’s need to pay only disputed amount of tax (no penalty be charged) by March 2020; scheme will be available till June 2020 but some additional payment to made in-addition to tax

CBDT to adopt Taxpayer’s charter

PAN shall be instantly allotted on the basis of Aadhar without any filling up of form

Personal interface with tax administrators will be at minimum level

GST reforms will continue including a simplified return-filling form. FM says, refund has been simplified and has been fully automated.

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