Recently, Finance Minister Nirmala Sitharaman delivered the Union Budget in the Lok Sabha. This budget is also become more special because it is the longest budget speech under the Narendra Modi government. Currently, the economic growth of India is very low, so there is lots of hope with the latest budget and it also becomes important for the Modi government to deliver the budget which helps in the growth of the country as well as also provides benefits to each and every sector.
Before delivering the budget, the Finance Minister also pay respect to her ancestor, the late Mr. Arun Jaitely and then she announced the budget for the next year which addresses both the social and economic features of the country. After delivering the budget, she added that this budget will help us in regaining our economic growth in the next financial year.
The three major ideas that are concerned in the budget were;
- Economic Development
- Aspirational India
- Caring Society
So, now we are going to address some of the important highlights of the budget that are important for the growth of the country and provide us extra benefits.
Important Highlights of the Budget 2020
Income Tax: Rs. 40,000 crore boost for Middle-Class
The government offers an optional relief for the taxpayers with its latest budget, as it helps in strengthening the consumption and also boosts economic growth. Now taxpayers are able to take advantage of lower rate of income tax in different slabs by preceding specific deductions and consumptions. The new budget for the taxpayer is optional; they can also stick to the previous one.
The slabs and rates of new income tax are:
- 5lakh to 7.5lakh per annum: 10% from 20% earlier
- 7.5lakh to 10lakh per annum: 15% from 20% earlier
- 10lakh to 12.5lakh per annum: 20% from 30% earlier
- 12.5lakh to 15lakh per annum: 25% from 30% earlier
- More than 15lakh per annum: 30% without any exemptions.
Below 5lakh per annum, there is no tax in both old and new budgets.
Real Estate: Affordable Housing for Buyers and Builders
The ’Housing for All’ program in the latest budget helps in boosting the affordable housing in the country. It is clearly proposed in the budget that the date of taking a loan to avail extra deduction of 1.5lakh rupees is extended up to one year to 31st March 2021. Property dealers also get a tax holiday for the profit they earned through affordable housing projects. The finance minister also said that the date of approval will be extended for an additional year.
Dividend Distribution Tax eliminated
The budget also proposed that the Modi government abolished the dividend distribution tax. This rule is about tax on the dividends issued by companies. Before the arrival of the new rule, companies have to pay 15& for DDT which also includes a surcharge.
Fiscal Deficit Target: Invoked ‘Escape Clause’
With the release of new budget, India’s Fiscal Deficit wants to settle at 3.5% in 2020-21, which was around 3.8% in the last year. The government also determined to invoke the escape clause which was provided in 2018 alterations to the Fiscal liability and Budget management Act.
Money deposit in the bank become safer
In the new budget, the Modi government also increases the insurance for the money deposit in the bank. Before this budget, in case of money loss from the bank due to any reason, then the person was allotted 1lakh rupees, but now it will be 5lak rupees. The decision is taken due to the fall down of PMC bank that led to a constraint on put down withdrawals.
LIC listing proposed through an IPO
The government decided to hand over a part of its stake in LIC via an IPO (Initial Public Offering). Previously the insurance company LIC is fully owned by the Government.
Various New airports, smart cities, and Gas Grid
In the latest Budget, the finance minister also said to assign around 1.7lakh crore rupees for NIP (National infra Pipeline) that aims to enhance the living of every citizen of the country and also provides the opportunity for employment.
She added that this program will initiate engineers, graduates, and economists to open startups and provide employment to the people of the country and the government will provide support to these startups.
Some of the important highlights of this program;
- National infra pipeline of around 106lakh rupees to address the requirement of the country.
- National Logistic policy is going to be released very soon.
- Delhi-Mumbai expressway is also going to complete in 2023.
- Wi-Fi facility in every railway station
- Solar power to be generated alongside rail tracks
- More than 100 new airports by 2024
- Extend national gas grid
- Delivering Rs 6000 crore to Bharat Net
There are many other policies are launched in this program, which helps to take our country into the advanced level.
Vivad Se Vishwas
The Finance minister also announced the scheme for tax litigation named Vivad se Vishwas. Through this scheme, she said that the disputed tax amount can be paid before 31st March 2020 and no interest and penalty will put on the amount. People will also pay the tax till 30th June, but then they had to pay some extra charge.
Doubled Disinvestment Target to a lofty 2.1lakh crore rupees
In the new budget, the government aims to gain 2.1lakh crore via disinvestment in 2020-21. The 90000 crores will come from selling the stake in public sector banks and the left amount will be recovered from selling a stake in the central public sector.
Increased FPI limits in Corporate Bonds
The government also plans to increase the limit of investment for foreign investors in corporate bonds as now it will be 15%, which is more than the previous one 9%. She also allocated debt-exchange traded funds which mainly comprise the government securities.
There are various other sectors for which the government allocated the funds in the latest budget. For the education sector, the government allocated the budget of Rs.99300 crore, for healthcare the budget is of Rs.69000 crore, and the budget is also for the pollution. There are also various new schemes in this budget, which helps in the growth of the country. The major focus of this budget is skill development. So, the people of the country have huge hope with this budget and they hope that this will help in the growth of the country.