Union Budget 2020-21

Union Budget 2020-21 presented by Hon’ble Finance minister Nirmala Sitharaman on Saturday Feb 1, 2020

The Union budget seems to be a very optimistic, visionary breakthrough budget with an aim to empower today’s youth with a spirit of entrepreneurship thereby moving in the direction of taking digital India to a totally different level.

There’s a bit of something for everyone right from the agricultural/farm sector & MSME’s & startups right upto the the Corporate sector.

The aim of this budget is to continue the various reform measures undertaken by the government so far in combination with additional reforms to stimulate growth and simplify the tax structure by adhering to the ‘Ease of doing business’ model which aims at ease of compliance and also to reduce litigations.

Some of the highlights of the Union Budget 2020-21 are enumerated below:

Important Key Statistics as Specified by the FM

GST benefit of Rs 1 Lakh Crore has been extended to consumers

GST has integrated the country economically

A new and simplified GST return system coming this April

Between 2006-2016 India was able to raise 271 million people out of poverty

Government is able to control inflation

An average household now saves about 4% of its monthly spend on account of reduced GST Several steps on formalization of economy have been taken up

In 2Years, 60 Lakhs new taxpayers added

40 crore income tax returns have been filed

5th Largest economy in the world

Government facilitate maximum money in the hands of people

Safe Drinking Water, Swachh Bharat Mission, Sanitation, Ayushman Bharat, PM Awas Yojana, Saubhagya are some major schemes which helped the people of Country

Insured 6.11 crore farmers under Pradhan Mantri Fasal Bima Yojna

PM Kisan Samman Nidhi Yojana and Gramin Sadak Yojana adding farmers to the formalized system

Central govt’s debt has come down to 48.7% in March 2019 from 52.2% in March 2014

FDI in India rises to USD $284 billion during 2014-19

At the elementary level, girl enrolment is currently at 94.32 per cent compared to 89.28 per cent for boys

Focus on Aspirational India, Economic Development, Caring Society

  1. Agriculture

16-points action plan to help farmers

Government to incentivize farmers to go solar

Govt proposes plans to help farmers use proper manure and little water

Govt to build up the seamless national cold supply chain for perishables

Horticulture projects at the district level will be given importance. Online portal on Jaivik Kheti will be strengthened

Farmers with barren land can set up solar power units so that they can get a living out of it

Food Corporation of India and Warehousing Corporation of India to build warehousing facility on their land

Agri credit target for the year 2020-21 has been set at 15 lakh crore rupees

Framework for development, management and conservation of marine fishery

MGNREGA to be used to develop fodder farms

Expansion of PM KUSUM Scheme under which 20 lakh farmers would be provided fundsto set up standalone solar pumps.

2. Education and Skill Development

Rs 1 lakh Crore push for education

Rs 99,300 crore outlay for education sector in 2020-21 and Rs 3,000 crore for skill development

Govt propose National Police University and National Forensic University

With the largest working population, steps to ensure education for all

An allocation of Rs 8,000 crore for National Mission on Quantum Computing and Technology

3. Water and Sanitation

Action plan to ease India’s water problems starts with helping 100 districts

Govt proposes Rs 3.6 lakh crore towards piped water supply to households

Allocation for Swachh Bharat for 2020-21 stands at Rs 12,300 crore

4. Healthcare

Govt to expand Mission Indradhanush, add hospitals to Ayushman Bharat

Allocated Rs 69,000 crore to Healthcare, inclusive of Rs 6,400 crore for Jan Arogya Yojana

Hospitals will open in tier 2 and tier 3 cities covered under Aspirational districts scheme which still do not have a Ayushman-empanelled hospital

Proceeds from taxes on medical devices will be used for this vital health infrastructure

The government has aimed at spending target of 2.5 per cent of GDP till 2025

5. Employment and Entrepreneurship

FM makes entrepreneurs’ lives easier with new investment clearance cell

National Logistics Policy will be revealed soon to make MSMEs more competitive

Govt plans to boost manufacturing of mobile phones, electronic equipment

Single investment clearance window to be set up for promoting entrepreneurship

Govt to set up national recruitment agency for recruitment of non-gazetted posts

Amendments to be made to enable NBFCs to extend invoice financing to MSMEs

6. Infrastructure

Five new smart cities to be developed

Rs 20,000 crore for the renewable energy sector

Data as the new oil: Policy soon to enable private sector to build data centre parks

Rs 6000 crore boost for internet connectivity

Govt proposes Discoms replace conventional meters with smart pre-paid meters

5 archaeological sites to be developed with on-site museums

Rs 1.7 lakh crore has been provided for transport infrastructure

7. Road

New infra road map to lend a cutting edge to flagship NIP scheme

Outline a plan to invest Rs 1.05 lakh crore ($1.48 trillion) in infrastructure over the next five years

A national logistics policy to be released soon

A single window e-logistics market with focus on MSMEs

Development of 2,500 km access-controlled highways and 2,000 km of strategic highways

12 lots of highway bundles spread over 6,000 km will be monetized before 2024

Delhi-Mumbai Expressway to be ready in 3 years

6,500 new projects under NIP across sectors

8. Railways

1,150 trains will run under the public private partnership (PPP) mode

Four stations will be redeveloped with the help of the private sector

Indian Railways to set up a ‘Kisan Rail’ through Public-Private Partnership for farmers

On the fast track: More Tejas-like trains between key stations

9. Aviation

100 more airports to be developed by 2025

10. Tourism

Rs 2,500 Crore to boost tourism

11. Textile and Exports

Rs 1,480 Crore for National Textile Mission

NIRVIK (NiryatRin Vikas Yojana) scheme to provide enhanced insurance cover and reduce premium for small exporters and simplified procedures for claim settlements

12. Social Welfare

Enhance allocation of Rs 9000 Crore for senior citizens and ‘Divyang’

Rs. 4,400 Crore allocated for cities to ensure clean air

Rs 53,700 Crore for welfare of schedule tribes

Rs 85,000 Crore for welfare of SC and other backward classes

Insurance cover increased to Rs 5 lakh per depositor

13. Others

Rs 100 crore allotted to prepare for hosting G20 presidency in 2022

Allocation of Rs 30,757 crores for 2020-21 for Jammu and Kashmir and Rs 5,958 crores for Ladakh

FY21 fiscal deficit target pegged at 3.5% of GDP

Government will bring LIC IPO

Government to sell part holding in LIC, also in IDBI

Govt to sell govt stake in IDBI Bank to private investors

FY21 divestment target pegged at Rs 2.1 lakh crore

Certain specified categories of government securities will be open fully for NRIs

Nominal GDP growth for FY21revised to 10%

Direct (Income Tax) Highlights

New simplified personal income tax regime (Lowest, Simplest, Smoothest)

•Those earning up to Rs 5lakhs are exempt from paying taxes

10% tax for everyone earning Rs5-7.5 lakh against the current 20%

15% tax for everyone earning Rs7.5-10 lakhs against current 20%

20% tax for everyone earning Rs10-12.5 lakhs against current 30%

25% tax for everyone earning Rs12.5-15 lakhs against the current 30%

•Those earning more than Rs15 lakhs get no exemptions

New income tax rates will be optional

FM proposed to remove the deeply unpopular dividend distribution tax (DDT)

Concessional corporation tax rate for electricity generation Co’s in place

Govt proposes 100% tax concession to sovereign wealth funds on investment in infra projects

Housing becomes more affordable, gives tax holiday to affordable housing developers

New power generation companies will have to pay just 15 % tax under the new corporate tax regime

Govt proposes deferment of tax payment by employees on ESOPs from startups by 5years

Tax on Co-op societies to be reduced to 22% plus surcharge, as against current 30%

Govt extends Rs1.5 lakh tax benefit on interest paid on affordable housing loans to March 2021

FM proposes a scheme to bring down litigation in direct taxation scheme; 4.83 lakh direct cases pending in various appellate forums

‘Vivad se Vishwas’schemefordirecttaxpayerswhoseappealsarependingatvariousforum

Govt to launch system for instant allotment of PAN on basis of Aadhaar

Health Cess on import of medical equipment imposed in Budget

Long-term capital gains (LTCG)tax stays

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Credit – https://www.indiabudget.gov.in/index.php

Article By Bizlinkz CFO Services Team