Key Highlights of Union Budget 2020-21

DIRECT TAX

1. Corporate tax for new manufacturing Companies & power generation companies brought to 15% and existing companies to 22% .

2. Govt. has exempted individual with income upto Rs. 5 lakh

3. New Simplified new tax for FY 2021-22 are as:

4. 70 exemptions and deduction removed. Remaining exemptions and deductions to be reviewed and rationalised in coming years.

5. Dividend distribution tax current is 15% plus surcharge, Company will need not to pay DDT, recipient will required to pay tax in their hands.

6. To make foreign funds available interest paid withholding tax rate reduced to 5%.

7. Startup definition limit increased to 100 crore from 25 crore

8. Co-operative societies to be taxed at 22% + 10% surcharge and 4% cess with no exemption/deductions.

9. Cooperative societies exempted from Alternate Minimum Tax (AMT)

10. 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.

11. Additional deduction up to Rs. 1.5 lakhs for interest paid on loans taken for an affordable house extended till 31st March, 2021.

12. Date of approval of affordable housing projects for availing tax holiday on profits earned by developers extended till 31st March, 2021.

13. Tax Audit Limit under section 44AB of the Income Tax has been increased from 1 Crore to 5 Crore for small retailer, trader and shopkeepers having businesses carrying out less than 5% business transactions in cash.

14. Limit of difference between circle rate and transaction value in capital gain on property has been increased from 5% to 10%.

15. For registration of charitable organisation completely electronic and provisional registration also provided for 3 years if charitable activities to be started.

16. Unique registration number (URN) to be issued to all new and existing charity institutions.

17. Face-less assessment scheme and Faceless Appeals will also be possible.

18. Vivad se Vishwash Scheme (No dispute but trust Scheme), Just pay disputed tax amount and no interest or penalty till 31st March, 2020 thereafter this scheme will remain 30th June, 2020 with some interest or penalty.

19. nstant PAN through Aadhar.

20. Withholding Tax of 5% under section 194LD for interest payment to  Foreign Portfolio Investors (FPIs) and  Qualified Foreign Investors (QFIs).  in

21. Withholding tax of 5% under section 194LD to the interest payment made on the Municipal Bonds.

22. Withholding tax rate reduced  from 5% to 4% on interest payment on the bonds listed on  its exchange in order to incentivise listing of bonds at IFSC exchange.

23. Claiming deduction for donation, it is proposed to pre-fill the donee’s information in taxpayer’s return on the basis of information of donations furnished by the done

24. Necessary amendments to the provisions of the Income-tax Act for  Losses of merged banks

25. Income Tax Act to mandate the  Central Board of Direct Taxes (CBDT) to adopt a Taxpayers’ Charter. The details of the contents of the charter shall be notified soon.

INDIRECT TAX

1. GST: Cash reward system envisaged to incentivise customers to seek invoice.

2. Simplified return with features like SMS based filing for nil return and improved input tax credit flow to be implemented from 1st April, 2020 as a pilot run.

3. Dynamic QR-code capturing GST parameters proposed for consumer invoices.

4. Electronic invoice to capture critical information in a centralized system to be implemented in a phased manner.

5. Aadhaar based verification of taxpayers being introduced to weed out dummy or non-existent units.

6. GST rate structure being deliberated to address inverted duty structure.

7. Customs duty raised on footwear to 35% from 25% and on furniture goods to 25% from 20%.

8. Basic customs duty on imports of news print and light-weight coated paper reduced from 10% to 5%.

9. Customs duty rates revised on electric vehicles and parts of mobiles.

10. 5% health cess to be imposed on the imports of medical devices, except those exempt from BCD.

11. Lower customs duty on certain inputs and raw materials like fuse, chemicals, and plastics.

12. Higher customs duty on certain goods like auto-parts, chemicals, etc. which are also being made domestically.

13. Customs Act being amended to enable proper checks of imports under FTAs.

14. Excise duty proposed to be raised on Cigarettes and other tobacco products, no change made in the duty rates of bidis.

15. Anti-dumping duty on PTA abolished to benefit the textile sector.

FINANCIAL SECTOR

1. 10 banks consolidated into Four.

2. 3,50,000 crore capital infused in public sector bank.

3. Deposit Insurance Coverage to Rs. 5 lakh from Rs.1 lakh per depositor.

4. NBFCs eligibility limit for debt recovery reduced from Rs. 500 crore to Rs 100 crore asset size. Rs 1 crore to Rs 50 lakh loan size.

5. Government to sell its balance holding in IDBI Bank.

6. NPS separation of government employees from PFRDAI.

7. Factor Regulation Act 2011 to be amended

8. An app-based invoice financing loans product for MSMEs to be launched.

9. Rs 1000 crore scheme anchored by EXIM Bank together with SIDBI for selected sector such as pharmaceuticals, auto components and others.

10. FPI limit in corporate bonds increased to 15% from 9% of its outstanding stock.

11. Government to sell a part of its holding in LIC by way of Initial Public Offer (IPO).

INFRASTRUCTURE

1. 100 lakh crore to be invested on infrastructure over the next 5 years. National Infrastructure Pipeline:

2. 103 lakh crore  for  National Infrastructure Pipeline project.

3. 1.7 lakh crore proposed for transport infrastructure in 2020-21.

4. Rs 18600  proposed for Bengaluru Suburban transport project

5. 100 more airports to be developed by 2024 to support Udaan scheme.

6. Smart metering to be promoted.

7. 22, 000 crore proposed for power and renewable energy sector in 2020-21.

8. 6000 crore proposed for Bharatnet programme in 2020-21.

9. 8000 crore proposed over five years for National Mission on Quantum Technologies and Applications.

10. 30,757 crore provided for  development of Union Territory of Ladakh & Jammu and Kashmir.

11. 5,958 also provided for the development of Union Territory of Ladakh.

INDUSTRY, COMMERCE AND INVESTMENT

1. 27,300 crore allocated for 2020-21 for development and promotion of Industry and Commerce.

2. Five new smart cities proposed to be developed.

3. Scheme to encourage manufacture of mobile phones, electronic equipment and semi- conductor packaging proposed.

4. National Technical Textiles Mission to be set up at an estimated outlay of Rs 1480 crore.

5. New scheme NIRVIK to be launched to achieve higher export credit disbursement, which provides Higher insurance coverage, Reduction in premium for small exporters, Simplified procedure for claim settlements.

AGRICULTURE, IRRIGATION AND RURAL DEVELOPMENT

1. 1.60 lakh crore for Agriculture, Irrigation & allied activities.

2. 1.23 lakh crore for Rural development & Panchayati Raj.

3. 15 lakh crore target set for the year 2020-21 for Agriculture credit –

4. PM-KISAN beneficiaries to be covered under the KCC scheme. NABARD Re-finance Scheme to be further expanded.

5. Comprehensive measures for 100 water-stressed districts proposed.

6. 1 lakh crore fisheries’ exports to be achieved by 2024-25.

7. Kisan Rail to be setup by Indian Railways through PPP:

8. Krishi Udaan to be launched by the Ministry of Civil Aviation: Both international and national routes to be covered.

9. Jaivik Kheti Portal – online national organic products market to be strengthened.

10. 20 lakh farmers to be provided for setting up stand-alone solar pumps.

11. 15 lakh farmers to be helped to solarise their grid-connected pump sets.

EDUCATION AND SKILLS

1. 99,300 crore for education sector

2. 3000 crore for skill development in 2020-21.

3. New Education Policy to be announced soon.

4. University proposed for policing science, forensic science, and cyber-forensics.

5. Up to 1-year internship to fresh engineers to be provided by Urban Local Bodies.

6. 150 higher educational institutions to start apprenticeship embedded degree/diploma courses by March 2021.

7. External Commercial Borrowings and FDI to be enabled for education sector.

8. Ind-SAT proposed for Asian and African countries as a part of Study in India program.

9. An independent, professional and specialist National Recruitment Agency (NRA) for conducting a computer-based online Common Eligibility Test for recruitment.

WELLNESS, WATER AND SANITATION

1. 69,000 crore allocated for overall Healthcare sector.

2. 6400 crore (out of Rs. 69,000 crore) for PM Jan Arogya Yojana (PMJAY):

3. Jan Aushadhi Kendra Scheme to offer 2000 medicines and 300 surgicals in all districts by 2024.

3.60 lakh crore approved for Jal Jeevan Mission: Rs. 11,500 crore for the year 2020-21.

4. 12, 300 crore allocation for Swachh Bharat Mission in 2020-21:

WOMEN, CHILD AND SOCIAL WELFARE

1. Allocation of Rs. 35,600 crore for nutrition-related programmes proposed for the FY2020-21.

2. 28, 600 crore proposed for women specific programs.

3. 85, 000 crore proposed for 2020-21 for welfare of Scheduled Castes and Other Backward Classes.

4. 53, 700 crore provided to further development and welfare of Scheduled Tribes.

5. 9,500 crore provided for 2020-21 for senior citizens and Divyang.

OTHER IMPORTANT POINTS

1. 2500 crore for tourism promotion.

2. 3150 crore proposed for Ministry of Culture for 2020-21.

3. 5 archaeological sites to be developed as iconic sites

4. 4400 crore for 2020-21 for ensuring cleaner air in cities above one million

5. A sum of Rs. 100 crore allocated to begin the preparations for G20 presidency to be hosted in India in the year 2022.

6. Companies Act to be amended to build into statues, criminal liability for certain acts that are civil in nature.

7. Revised Estimates of Expenditure: at Rs.26.99 lakh crore for the FY 2019-20

8. Revised Estimates of Receipts: estimated at Rs.19.32 lakh crore FY 2019- 20

9. Nominal growth of GDP estimated at 10% For year 2020-21

10. Receipts estimated at Rs.22.46 lakh cr For year 2020-21

11. Expenditure: at Rs.30.42 lakh cr. For year 2020-21

12. Fiscal deficit of 3.8% estimated in 2019-20 and 3.5% for 2020-21

13. Net market borrowings  Rs.4.99 lakh crore for 2019-20 and Rs.5.36 lakh crore for 2020-21.

14. Capital expenditure has been scaled up by more than 21%.