Budget 2020 Income Tax Slabs, Rates for FY, AY 2020-21 Expectation: The government is learnt to be considering tax incentives to individuals for buying home.
Budget 2020 Income Tax Slab Rates Changes Expectations: Presenting her second Union Budget in Parliament Saturday, Finance Minister Nirmala Sitharaman cut tax rates significantly for the salaried class, giving them relief, but provided they forgo exemptions. For financial year 2020-21, people earning up to Rs 5 lakh will not have to pay any income tax while those with income between Rs 5 lakh to Rs 7.5 lakh will have to pay 10 per cent of income tax, this is half of what they are paying now. Also, there will be 15% tax for income between 7.5 lakh to 10 lakh and 20 per cent tax for income between 10 lakh to 12.5 lakh. The Finance Minister also said people earning between Rs 12.5 lakh to Rs 15 lakh will have to pay 25 per cent of tax while those with income above Rs 15 lakh will pay 30 per cent tax.
READ | Govt invokes clause in FRBM Act to raise fiscal deficit target to 3.8% from 3.3%
So, as per the new announcements, a person earning Rs 15 lakh per anum and not availing any deductions will pay Rs 1.95 lakh tax in place of Rs 2.73 lakh now. Sitharaman also said Rs 40,000 crore per annum will be revenue foregone from new income tax rates for individuals and that the government has removed 70 exemptions, deductions with a view to further simplify tax regime.
READ | Budget 2020 new income tax regime will take away these exemptions; Full list
Nirmala Sitharaman, however, said the government expected tax buoyancy will take time and the recent cut in corporate tax will cause loss of substantial revenue in short-run and that economy will reap huge returns in due course.
Budget 2020 Income Tax Slabs, Rates for FY, AY 2020-21 Expectation: Will there be income tax reliefs for you in this Budget?
The 15th Finance Commission has recommended keeping the tax devolution share “virtually unchanged” to states at 41 per cent for the year 2020-21, compared to 42 per cent at present. The 1 percentage point reduction has been done to account for the reorganisation of the erstwhile state of Jammu and Kashmir. READ MORE
Moving to reform personal income tax, the government Saturday announced a new tax regime for individuals, offering much lower tax rates to taxpayers who are willing to forego all deductions and exemptions including those currently available on EPF contribution, tuition fee payment, principal and interest outgo on home loans, standard deduction of Rs 50,000 and medical insurance premium among others. READ MORE
As Nirmala Sitharaman, finance minister in Modi Government 2.0 presented her second budget, we asked the people of Delhi NCR about their expectations from Budget 2020.
The government’s strategy, or hope at least, is that leaving people with more money will help boost their consumption levels, which are at present quite subdued, as witnessed in the slump in sales of goods and services across the board. READ MORE
For every rupee in the government coffer, 64 paise will come from direct and indirect taxes, while states' share of taxes and duties is the single-largest expense head accounting for 20 per cent of the total spending, Budget documents showed. According to the Union Budget 2020-21 presented in Parliament by Finance Minister Nirmala Sitharaman on Saturday, goods and services tax collections will contribute 18 paise in every rupee revenue.Corporation tax will contribute 18 paise to each rupee earned. The collection from borrowings and other liabilities will be 20 paise, while income tax will yield 17 paise to every rupee collection. READ MORE
Budget 2020 announcement for the salaried class proposes a new tax regime slashing income tax rates and rejigging income tax slabs to slash total tax payable by individuals. But the rider: most key exemptions are gone if one were to go for this option: home loan interest, HRA, LTA, health insurance, along with the standard deduction. Here is a detailed list
BankBazaar.com CEO Adhil Shetty said, "To maximise their benefits from the new tax regime, taxpayers must understand what it means to claim or not claim deductions, since the new benefits are available only to those who don’t claim deductions. Under the new regime, the 30% slab, which was stuck for nearly a decade at Rs. 10 lakh, has finally moved to Rs. 15 lakh – an increase of a whopping 50%. Also, income up to Rs. 5 lakh is now exempted from tax, and lower tax rates apply on income between Rs. 5 lakh and 15 lakh if you don’t claim deductions. The move to increase tax-exempted income through the introduction of new tax slabs, as well as through the reported rationalization of deductions and exemptions, may be welcomed by taxpayers seeking simplicity in taxation. However, tax-payers own and want to continue with their tax-saving investments. Therefore, they must calculate whether they benefit by moving to the new regime without deductions or remaining in the old regime to continue claiming deductions."
The Trinamool Congress on Saturday slammed the Union Budget over removal of tax exemptions and questioned such a move in a country with no social security. Finance Minister Nirmala Sitharaman introduced new slabs and reduced the tax rate for different slabs for an individual income of up to Rs 15 lakh per annum, if a taxpayer opts for foregoing exemptions and deductions. "Tax cut ki goli mat do (don't lie about tax cuts). Read the fine print on the so-called IT cuts. Govt removes incentives to 'save' in a nation where there is no social security," TMC's national spokesperson and Rajya Sabha MP Derek O' Brien tweeted.
Commenting on the Budget 2020, Mr. Loknedra Ranawat, Founder & CEO, WoodenStreet says, "The allocation of Rs. 27,300 crore will lead to a setup of a better environment for industry and commerce. As the electronic sector is in focus of Government, new startups based on the manufacturing of electronic equipment and semiconductors will also see a rise. New investment in this sector and change in export norms will also give a boost to this industry. The subordinated debt for MSME’s and overall debt restructuring will also benefit the entrepreneurs and small businesses greatly."
Rajnath Singh on Budget 2020: "By focusing on reviving growth and rejuvenating demand the Budget is expected to trigger a new virtuous cycle in our economy. Despite the fact that there is lack of fiscal headroom to pursue fiscal expansion, the Budget has done a wonderful job at this juncture. Under the leadership of Prime Minister Narendra Modi, the nation aspires to be a $5-Trillion economy. The Budget today has emphatically laid down this goal to be achieved by 2024-25. I must congratulate the Prime Minister Narendra Modi and the Finance Minister Nirmala Sitharaman for giving the country an excellent Budget by addressing the aspirations of the people and at the same time clearly underling our national goals and priorities."
The Finance Minister has announced the 'Vivaadh sey Vishwas Scheme' for direct taxpayers to reduce tax litigations. There are currently 4.83 lakh direct cases pending in various appellate forums. Get complete waiver of interest and penalty by paying dispute amount by March 31, 2020.
Date of approval of affordable housing projects for availing tax holiday on profit earned by developers extended by 1 year.
Finance Minister Nirmala Sitharaman says the government has removed 70 exemptions, deductions with a view to further simplify tax regime. Concessional tax rate of 15 per cent extended to power generation companies, and 100 per cent tax concession to sovereign wealth funds on investment in infra projects.
Finance Minister Nirmala Sitharaman has concluded presentation of Union Budget 2020-21.
Sitharaman has proposed 15% tax for income between 7.5 lakh to 10 lakh; 20% tax for income between 10 lakh to 12.5 lakh; 25% tax for income between 12.5 lakh to 15 lakh; 30% tax for income above 15 lakh and no income tax for those with taxable income below Rs 5 lakh. Sitharaman says Rs 40,000 crore per annum will be revenue foregone from new income tax rates. Now you can calculate how much income tax you need to pay now
Finance Minister Nirmala Sitharaman says, 'Dividend distribution tax has been abolished. Companies will no longer be required to pay DDT. A total of Rs 25,000 crore is revenue foregone due to DDT abolition, says FM. This will make India an attractive investment destination.
#No tax upto Rs 5 lakh
# 10% tax for income between Rs 5 lakh to Rs 7.5 lak
# 15% tax for income between 7.5 lakh to 10 lak
# 20% tax for income between 10 lakh to 12.5 lak
# 25% tax for income between 12.5 lakh to 15 lak
# 30% tax for income above 15 lakh
FM Nirmala Sitharaman says that loss of substantial revenue in the short term due to the corporate tax rate cut. "New simplified income tax regime soon," she adds.
Deposit insurance cover being raised fivefold to Rs 5 lakh per account from Rs 1 lakh per account at present. This measure is important in the backdrop of recent default by cooperative lender PMC Bank. Steps being taken to professionalise cooperative banks.
Sitharaman says, 'A taxpayer charter will be institutionalised in the statute to build trust. And for that, we will introduce a statute in the law via this Budget 2020. "
Finance Minister Nirmala Sitharaman starts speaking about tax. Stay tuned to our LIVE blog to get all the updates
People note down important announcements for them outside BSE Mumbai. (Express photos by Nirmal Harindran)
The markets have fallen. The BSE Sensex is trading 88 points lower at 40,634, while the broader Nifty is 102 points lower at 11,932. It's not clear what has triggered the sudden fall. It could be because no concrete proposals have been announced even after one hour of the Finance Minister's Union Budget speech.
Investment clearance cell to be set up for entrepreneurs. Individuals will be offered assistance in funding as well and a portal will be set up for this purpose. The effort to step up entrepreneurship comes amid a growing realisation that Start Up India and other handholding schemes have not taken off as intended.
People watching news channels for the Budget News in a salon in Navi Mumbai. The general expectations from the budget for them are that the daily prices of essential commodities should be lessened (Express Photo Amit Chakravarty)
Meanwhile, Sensex trades flat with a marginal gain of 23 points at 40,747 following the first few Budget announcements by the FM
As Finance Minister Nirmala Sitharaman presents her second Union Budget, we’ll bring you all the reactions surrounding the budget from politicians to experts to common masses. Click here to know how people are reacting to it
Sitharaman says, "Budget 2020 is to boost the income of people and enhance their purchasing power. NABARD Refinancing Scheme to be further expanded, agri credit target for the year 2020-21 has been set at 15 lakh crore rupees."
Sitharaman says, "GST has resulted in efficiency gains in transport and logistics sector, inspector raj has vanished, it has benefitted MSME. Consumers have got a annual benefit of 1 lakh crore rupees by GST. An average household now saves about 4% of its monthly spend on account of reduced GST rates."
"Banks saw a thorough cleanup. Of our structural reforms, GST has been the most historic. From 2014-2019, the Modi govt has focused on fundamental structural reforms and inclusive growth," Sitharaman says in her budget speech and paid homage to former finance minister late Arun Jaitley.
Finance Minister Nirmala Sitharaman says the Union Budget 2020 is based on three themes — aspiration, economic development and caring society.
Finance Minister Nirmala Sitharaman says, "An average household now saves about 4% of its monthly spend on account of reduced GST rates. Over 60 lakh taxpayers have been added in the last 2 years."
Nirmala Sitharaman presents Union Budget 2020. She says, "With renewed vigour, under PM's leadership, we commit ourselves to present the people of India with all humility and dedication. People have reposed faith in our economic policy. Our people should be gainfully employed, our businesses should be healthy; for all minorities, women and people from SCs and STs, this Budget aims to fulfill their aspirations."
From giving more ways to save tax to incentives for homebuyers, people have a lot of expectations from the Finance Minister. Given economic growth has hit a low, people will be hoping the Finance Minister will help increase their disposable income. Find out what the common man thinks of the Union Budget 2020 here
Finance Minister Nirmala Sitharaman has begun presenting the Union Budget 2020. For real-time updates on the Union Budget, follow our live blog. For news on how the markets are reacting to Budget.
Now, stay tuned to our live blog on Budget 2020 Income Tax Slabs and Rates to know the income tax rates announced by Finance Minister Sitharaman for the financial year 2020-21.
It is nil upto Rs 5 lakh. 20% of (Total income minus Rs 5,00,000) + 4% cess for those earning between Rs 5,00,001 to Rs 10 lakh. The rates are Rs 1,00,000 + 30% of (Total income minus Rs 10,00,000) + 4% cess for people earning Rs 10,00,001 and above.
It is nil upto Rs 3 lakh. For people earling between Rs 3,00,001 to Rs 5 lakh, it is 5% of (Total income minus Rs 3,00,000) + 4% cess. For Rs 5,00,001 to Rs 10,00,000, the rates are Rs 10,000 + 20% of (Total income minus Rs 5,00,000) + 4% cess and for those earning Rs 10,00,001 and above, it is Rs 1,10,000 + 30% of (Total income minus Rs 10,00,000) + 4% cess.
Income tax slabs for resident individual below 60 years of age: It is nil upto Rs2.5 lakh. For people earning between Rs 2, 50,001 to Rs 5 lakh, it is 5% of (Total income minus Rs 2,50,000) + 4% cess. For Rs 5,00,001 to Rs 10 lakh, it is Rs 12,500 + 20% of (Total income minus Rs 5 Lakh) + 4% cess) and for those earning Rs 10,00,001 and above, the rates are Rs 1,12,500 + 30% of (Total income mnus Rs 10 lakh) + 4% cess).
Some believe the Budget should focus on increasing government expenditure to spur economic growth. Others opine the exact opposite and point towards the rising fiscal deficit to assert that the government has already been spending too much. Still others point to the increasing gap in actual revenues accruing to the government, thus severely constraining its ability to spend. Read More
From disinvestment to bank recapitalisation to rural development, Nirmala Sitharaman in her over two-hour-long speech spoke of what the government’s focus in 2019-20. Sitharaman announced raising the disinvestment target to Rs 1,05,000 crore from FY2019-20 as against Rs 90,000 crore set in the interim budget. Here's a quick recap
Finance Minister Nirmala Sitharaman carries the Union Budget 2020 papers in a 'bahi khaata' while leaving her office to present it in the Parliament today. She is accompanied by MoS Finance Anurag Thakur and Chief Economic Advisor Krishnamurthy Subramanian. (Express photo by Praveen Khanna) See more pics here
The basic tax exemption limit for an individual depends on their age and residential status. According to age, resident individual taxpayers are divided into three categories:
1. Resident individuals below the age of 60 years
2. Resident senior citizens above 60 years but below 80 years
3. Resident super senior citizens above the age of 80 years
In the last six quarters, the economy has slumped from 8.1 per cent in January-March 2018 to 4.5 per cent in July-September 2019. From agriculture to manufacturing, almost all sectors have witnessed a slowdown in economic activity. Follow our live blog as we bring you the latest news and updates from Sitharaman’s speech, and provide an explanation and analysis of it.
Finance Minister Nirmala Sitharaman has arrived in the Parliament for the presentation of Union Bidget 2020. The Cabinet meeting will begin shortly.
As Finance Minister Nirmala Sitharaman prepares to table her second Union Budget, her ministry is likely to provide income tax relief to the middle class with an aim to boost consumption amid sluggish economic growth. Do you think it's the right move? Participate in our poll now.
Finance Minister Nirmala Sitharaman and MoS Finance Anurag Thakur met President Ram Nath Kovind ahead of presenting Budget in Lok Sabha. It's a customary briefing about Union Budget 2020-21.
A recognition of the central government’s actual fiscal deficit, which is most likely around 5 per cent, is the need of the hour, former Chief Statistician of India Pronab Sen said. In an interview with Aanchal Magazine and Anil Sasi, Sen said the deficit’s understatement by at least 2 percentage points has resulted in the central government’s debt being passed on to balance sheets of state governments and the PSUs among others, adding that the upcoming Budget should focus more on the expenditure side than further tax cuts. Read full interview here
Earlier, Long Term Capital Gains (LTCG) from the sale of listed equity shares and units of equity-oriented mutual funds were fully exempt. However, a change was brought in by the Finance Act of 2018 and tax is levied on LTCG exceeding Rs 1 lakh from the sale of listed equity shares and units of equity-oriented mutual funds. The tax on LTCG has impacted investors who are already saddled with the burden of the Securities Transaction Tax. The government could consider increasing the limit of Rs 1 lakh to Rs 2 lakh to encourage taxpayers to make investments in the capital market.
Existing provisions limit the deduction of housing loan interest for a self-occupied property to Rs 2 lakh. The remaining loss, if any, can be carried forward over 8 tax years. The taxpayer pays interest on the loan every year which in itself exceeds Rs 2 lakh and adds on the carry-forward loss and typically remains unutilised only to lapse later. It is recommended that the government provide for higher deduction for interest on a housing loan, which would not only provide tax savings but also promote the housing sector.
In order to encourage individuals to meet their savings goals, the limit of deduction under Section 80C could be enhanced from Rs 1.5 lakh to Rs 2.5 lakh. The current limit of Rs 1.5 lakh typically may get exhausted through Provident Fund (PF) contributions, tuition fee, payment of housing loan principal (if prevalent) and life insurance premiums, which leaves little room for investment in other avenues. Like the National Pension System (NPS) the government can also look at carving out separate deductions for investment in schemes such as Public Provident Fund (PPF), National Savings Certificate (NSC), etc.
From an individual taxpayer’s perspective, here are a few changes that the government can bring in Budget 2020:
With the objective of enhancing the net disposable income in the hands of individual taxpayers, the government can consider introducing 10 per cent slab for people having taxable income between Rs 5 lakh and Rs 10 lakh and the 20 percent rate applicable for taxable income between Rs 10 lakhs to Rs 20 lakhs. The 30 per cent rate can be applied on taxable income above Rs 20 lakh. This rationalisation of tax rate slabs could be quite helpful for individual taxpayers as the tax rate presently steeply jumps from 5 percent to 20 percent once the taxable income exceeds Rs 5 lakh.
To give an incentive to purchase electric vehicles, deduction of up to Rs 150,000 in respect of interest paid on loan availed for purchase of such vehicle was introduced. This also helped the government objective of improving the environment and reducing vehicular pollution.
With the objective of providing an impetus to ‘housing for all’, an additional interest deduction of Rs 1.5 lakh was permitted for first time for home buyers purchasing an affordable house of up to Rs 45 lakh, for loans sanctioned till 31 March 2020, subject to conditions. Additionally, notional rent on a second self-occupied/ vacant property held by an individual was allowed as exempt from tax, which helped in reducing the tax liability on account of notional taxation.
Last year, it was announced that individuals earning income up to Rs 5 lakh are not required to pay tax as the rebate of Rs 2,500 was increased to Rs 12,500. This increased the take-home pay in the hands of individuals.
Last year, after presenting the interim Budget in February 2019, the government presented the Union Budget 2019 in the month of July after winning the general elections. In both Budgets, we saw incentives and benefits being doled out for individual taxpayers. With Budget 2020, expectations are high that Finance Minister Nirmala Sitharaman will bring benefits for the common man. This is also quite likely since the government may want to increase the purchasing power and consumption of individuals to boost demand in the economy. Read More
The benchmark indices on the BSE and National Stock Exchange (NSE) opened around 0.5 per cent lower on Saturday ahead of the presentation of the Union Budget 2020 in the Parliament later today. Generally, the markets are shut during the weekends, but they are open today on account of the Union Budget 2020. Follow Budget 2020 Market Live Updates here
On the direct tax front, the government has already announced a sharp cut in corporate tax rate from 30 per cent to 22 per cent (excluding cess and surcharge) in September 2019 to promote investment activity in the economy. Even on the indirect taxes front, the GST rates have been reduced on the multiple occasions. The government has pegged its tax collections to drop by Rs 1.45 lakh crore annually as a result of cut in corporate tax rates in the short term. Over a period, rising economic growth through higher investment activity is expected to compensate for the tax shortfall.
Like last year, the Budget 2020 documents are placed inside a “bahi khaata.” It is a red silk folder, embossed with the golden State emblem. Sitharaman, who ditched the leather briefcase in 2019 for a traditional “bahi khaata” — or red, handmade ledger — had last year said it was “high time we move on from the British hangover, to do something on our own”. Bahi khaata is a traditional Indian method of bookkeeping which employed double entry. It is said to have predated ‘The Pacioli’s Summar’ — written in 1494 and seen as the world’s oldest audit book — and even Greek and Roman systems.
In another possible move, the government is learnt to be considering tax incentives to individuals for buying home. An official said that since real estate is a key sector and has the biggest multiplier effect on the economy, there could be benefits targeted for new home buyers. While taxpayers are hoping for relief in the budget, the government will have to balance its fiscal position in the wake of lower-than-projected overall tax collections.