Key highlighted Income Tax –Budget 2020

Key highlighted –Budget 2020

                                INCOME TAX

1.   New Tax regime is optional. Assessee can opt old regime with deductions and exemptions. Under new regime.

• Exempt upto 2.5 lakhs.
• 5% slab for income between 2.5 lakh to 5 lakhs.
• 10% slab introduced for income between 5 lakh to 7.5 lakhs.
• 15% slab introduced for 7.5 lakh to 10 lakhs.
• 20% slab introduced for 10 lakh to 12.5 lakhs
• 25% slab introduced for 12.5 lakh to 15 lakhs
• 30% for income above 15 lakhs.

2.      Vivaad se vishwas scheme. Taxpayer has to pay only disputed tax. Complete waiver of interest and penalty provided he pays by 31 March 2020.Person availing after 31 March 2020 will have to pay some additional amount. Scheme open upto 30 June 2020 only.

3.      Around 70 deductions have been scrapped under new tax regime.

4.      Current DDT rate was 15% plus applicable surcharge and cess. In this budget DDT is scrapped. Companies will not pay DDT. Dividend will be taxable in hands of recipient

5.      Cooperative society current tax at 30% plus surcharge and cess. New option tax at 22% plus 10% surcharge plus 4% cess with no deductions.

6.      Tax Audit: MSMEs currently having business turnover above 1 crore need to get accounts audited. The turnover threshold is now increased to 5 cr. The increased limit shall apply only to those businesses which carry out less than 5% business transaction in cash.

7.      Deduction of 150000 was given to affordable housing in previous budget. Loan sanction date has been increased to 1 year i.e., upto 31 March 2021.

8.      Real estate transaction taxable limit increased from 5 to 10%.

9.      Charitable institution registration process switched from manual to electronic.

10.   More than 60 lakh taxpayers have been added in last 2 years.

11.   Corporate rate for new companies reduced to 15% and for existing companies at 22%.

                          OTHER

12.   FDI has increased to 284 billion dollars in 2014-2019.

13.   Agriculture credit availability for 2021 is set at 15 lakh crores.

14.   IDBI holding to be sold to private sector.

15.   Insurance cover for deposits to be raised from 1 lakh to 5 lakh.

16.   FDI Incorporated bonds increased from 9% to 15%.

17.   Part of LIC government holding to be sold as IPO.

18.   GDP estimated nominal growth based on trends for 2020-21 is 10%.

19.   Receipts for 2020-21 are estimated at 22.46 lakh crores. Level of expenditure estimated at 32.24 lakh crores.

20.   There was a Fiscal deficit of 3.8% in 2019-20 and an estimated 3.5% for 2020-21.

21.   Net market borrowings for 2019-20 were 4.99 lac crores and for 2020-21 they are estimated at 5.36 lac crore.