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Feb 01, 2020 07:19 PM IST | Source: Moneycontrol.com

Income Tax Budget 2020 Highlights: Current reforms aim to ensure money reaches taxpayers, FM Sitharaman says

FM announces new income tax slabs/rates, tweaks exemption structure. Cuts tax rate for those in the Rs 5-15 lakh tax bracket.


Key takeaways:
- To introduce a new simplified personal tax regime
- No income tax for income up to Rs 5 lakh
- 10% income tax for those earning between Rs 5 lakh to Rs 7.5 lakh versus 20% earlier
- 15% income tax for those earning between Rs 7.5-10 lakh versus 20% earlier
- 20% income tax for those earning between Rs 10-12.5 lakh versus 30% earlier
- 25 income tax for those earning between Rs 12.5-15 lakh versus 30% earlier
- Income above Rs 15 lakh to continue to pay tax at 30%
- New income tax scheme is optional, without exemptions
- Deposit insurance coverage raised to Rs 5 lakh from Rs 1 lakh
- New debt ETF to be launched consisting mostly of G-Secs
- NRIs to be allowed to invest in certain categories of G-Secs
- GIFT City to set up International Bullion Exchange
- Dividend Distribution Tax (DDT) abolished, shifted to individuals instead of companies
- Removes 70 exemptions, deductions with a view to further simplify the tax regime
- Govt mulls changes in PFRDA Act; to separate it from NPS Trust for govt staff
- To launch a new direct tax dispute settlement scheme
- To bring instant allotment of PAN via Aadhaar

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  • February 01, 2020 07:18 PM IST

    We bring to an end our coverage on the Income-Tax announcements made by Finance Minister Nirmala Sitharaman in Budget 2020. Thank you for staying with us.
    You can follow the LIVE Budget coverage here
     

  • February 01, 2020 07:16 PM IST

    Want to calculate your Income Tax? Here's an easy tool to do it: 

    Income Tax Calculator 2020-21

  • February 01, 2020 07:13 PM IST

    Budget Reaction

    Jayant Sinha: Whether it is the upper-middle class, the people from the agriculture sector and women, the Budget was comprehensive.

  • February 01, 2020 07:05 PM IST

    Budget Reaction

    Rajnish Kumar, Chairman, SBI: “The Union Budget 2020 is an attempt to endow India with improved health and better access to education while unleashing a better infrastructure through better connectivity. The announcement of the new income tax scheme without exemptions is to move forward to a regime of a simplified and clutter-free direct taxation. The rural sector is the beneficiary of a larger outlay. The new export credit scheme is aimed at improving the credit flow for exporting units, mainly the MSME ones, as it will substantially reduce the collateral requirement as well as the overall interest burden of the ECGC regime. The increase in deposit insurance limit from existing Rs 1 lakh to Rs 5 lakh was necessary. Introduction of simpler GST filing system from April 2020 is a welcome step and it will add further depth to the current GST regime. Simplified GST return for MSMEs will facilitate ease of compliance. Similarly, relaxation in the SARFAESI norms for NBFCs will lead to better recovery and borrower discipline in this sector. Overall, the budget numbers are realistic and the staggered transition to a lower fiscal deficit is in perfect consonance with the growth objective.”

  • February 01, 2020 06:59 PM IST

    Budget Reaction

    Former Economic Affairs Secretary Subhash Chandra Garg said that overall, the Budget left the economy where it currently stands. In an interview with CNBC-TV18, Garg also said that the expectation of stimulus for growth was unreasonable. He also noted that there is a realism in the assessment of the tax receipts.

  • February 01, 2020 06:53 PM IST

    Budget Reaction
    Parizad Sirwalla, Partner and Head, Global Mobility Services-Tax, KPMG in India (2/2): In a significant move, amounts contributed by the employer towards NPS, PF and superannuation fund will be taxable beyond 7.5 lakhs p.a.  Also, the proposed changes in residency rules will significantly impact the taxability of inbound and outbound population.  
    Further, to boost startups, taxability of ESOPs has been deferred to earlier of 5 years from exercise or sale or resignation by the employee. Levy of Dividend Distribution Tax has been replaced by shareholder level taxation.
    To sum up, there are a lot of changes in personal taxes and individuals will be eagerly waiting to further decode the law to see the benefits stored for them.  

  • February 01, 2020 06:49 PM IST

    Budget Reaction
    Parizad Sirwalla, Partner and Head, Global Mobility Services-Tax, KPMG in India (1/2): The Budget 2020 is woven around three themes i.e. Aspirational India, economic development and building a caring society for all.  In the longest budget speech, FM Sitharaman introduced a series of tax reforms for individual taxpayers. 
    The existing tax slabs have been rejigged to make way for a new personal tax regime for individuals opting to forego prescribed tax deductions and exemptions such HRA, tax-saving investments under section 80C, the standard deduction for salaried taxpayers, etc. Additional home loan interest deduction of Rs 1.5 lakhs has been extended by one year for first time home buyers. In another step, towards reducing human intervention and simplification, facility for faceless appeals, instant e-allotment of PAN basis Aadhaar and pre-filled income tax return forms will help everyone.