The key points you can get from Budget 2020

the key points you can get from Budget 2020

On 1st of February 2020, the finance minister of India, Smt. Nirmala Sitharaman presents the Union budget for 2020-2021 in parliament. After she presented the budget, she summarizes her budget for the people of Indian.  

As per Nirmala Sitharaman, she states the all the people of India will gain from it in terms of business and employment. If you are from a minority community like SCs and STs, then also the budget will excellently help you. 

In the budget, you will get to see that there are three themes that the Budget 2020-21 aims at. These themes are mentioned below. 

  1. Aspirational India
  2. Caring Society
  3. Economic Development

Moreover, the finance minister of India points out the boost of income and how the purchasing power of Indian people will increase. She, too, given the focus on the income of farmers and state that their income will get double by 2022.

Disappointments from the budget

If you take a look at the budget of 2020-21, then you can find that there are also many flaws in it. Many people find the budget not up to mark and question many things in it. 

The things that are not up to mark or not mentioned in the budget are here below. 

  • After the budget is presented, it is seen that nearly 35 million income taxpayers of India are not happy with it. They all are not satisfied as there is no reduction in the tax rates. 
  • The next thing that makes the people upset is about LTCG. LTCG or Long term Capital Gain got no change in the budget. Due to that, many investors are not happy about it. 
  • In the budget, it is seen that the government of India has planned to go for the aggressive privatization. All these things are done so that the asset can sell, and from that, they can generate the revenue. 
  • LIC of India employees is not happy as there is a proposal of going for the partial stake sale. 

About the new income tax slab

If you take a look at the new income tax slab, then you can see that they have provided the best options for you all in nature. It means that a taxpayer needs to choose the best options that are from two tax slab options. 

It is seen that it is always the best idea for you all to go for the new slab as it comes with many benefits and it is for a selected group of people. All these things depend on the total income of the taxpayer. 

Apart from that all, there are many things that income earners must keep in mind. 

For all that, you must know that who all are claiming the exemptions now need to pay more tax as per the new tax regime. But if you go for the existing tax slab, then it will not affect you much. 

About the dividend distribution tax

As per the current budget, now the dividend distribution tax no more exists. Instead, they will charge you as per the slab rates. So, till now, the dividends that are all given by all companies or even the mutual funds will not get tax in the hand of the investor. 

But it does not stop there as the companies, or even the mutual fund company, can help in deducting the DDT. All will be done by paying the dividend to the investor, and for all that, the effective tax rate is state to be around 20.6 percent. But in case of equity, it is 11.5 percent, and for debt funds, it stands at 29 percent. 

For NRIs

  • A person will be said to be NRI if the stay in India is less than 120 days in a financial year.

If you are:

  • NRI for seven years, then you will be treated as Resident but not Ordinary Resident.
  • If you are not a tax resident in other countries, then you will be fall under tax resident of India.

Additional changes for you all

  1. If you are traveling internationally or sending money outside India, then you will have to pay a 5 percent tax.  
  2. You can extend the Home Loan tax Benefits under Section 80EEA for a year.
  3. All the deposits in any commercial banks and cooperative banks are now insured. All these things now come under the Deposit Insurance and Credit Guarantee Corporation.
  4. All the employees to all contribute to NPS, AEPF, and other superannuation of funds will not have to pay taxes.