The following are the highlights of Budget 2020 announced by Finance Minister today
New slab rate (without exemption)
10% income 5 7.5 lakhs
15% 7.5 10 lakhs
20% 10 12.5 lakhs
25% 12.5 15 lakhs
30% Above 15 lakhs
Income upto 5 lakhs no tax
if individual earns income of 15 lakhs then tax would be 1.95 lakh visavis 2.73 lakhs as earlier
New scheme of individual tax rates is optional
FM said reviewed all existing income tax exemptions and removed 70 of them in new regime and will review remaining and rationalize
Propose to remove DDT and dividend would be taxable in the hands of shareholders; removal of cascading effect of dividend distributed by holding to subsidiary (25k Crore revenues forgone on account of DDT abolition)
Concessional tax rate for electricity/power generation companies
100% tax exemption on new investment by foreign funds in infrastructure sector by 2024 with a minimum lock in period of 3 years
ESOPs given by startups to employees currently taxed as perquisites; differing of tax payment by employees to 5 years
Increase in turnover limit from 25 Crore to 100 Crore for startups
Deduction can be claimed by startups upto 10 years
Tax audit turnover threshold limit increased from 1 Crore to 5 Crore
Concessional 5% withholding tax has been extended to municipal bonds.
Cooperatives are taxed at 30 percent now
Cooperatives can choose a 22 percent tax with 10 percent surcharge and 4 percent cess with no exemptions.
Complete online registration of charitable institutions
Faceless appeals on the line of faceless assessment
Vivad se Vishwas Scheme introduced New direct tax dispute settlement scheme
More than 4.83 lakhs cases pending at various forums
Taxpayer's need to pay only disputed amount of tax (no penalty be charged) by
March 2020; scheme will be available till June 2020 but some additional payment
to made in addition to tax
CBDT to adopt Taxpayer's charter
PAN shall be instantly allotted on the basis of Aadhar without any filling up of form
Personal interface with tax administrators will be at minimum level
GST reforms will continue including a simplified return filling form. FM says, refund has been simplified and has been fully automated.
GST bring synergy in logistics sector (20% time reduction)
60 lakhs new taxpayers added via GST introduction
New simplified GST returns from April 2020
FDI elevated during period 20142019 to $284bn
Central government debt reduced to 48.7% of GDP in 2019
16 points action plan for agricultural & irrigation sector under aspirational India
New Education Policy will be announced soon
ECB and FDI will open in education sector
Degree level full fledged online programs to be started
National Police University & Forensic university is proposed to be set up
INR 99,300 Crore proposed for education sector
Investment clearance cell to be set up to facilitate investments and to provide advisory at State as well as Centre level
5 new smart cities to be developed
Move to develop each district an export hub
INR 27,300 Crore for promotion of industry & commerce
National logistics policy to be released soon
Digital refund of duties to exporter
Setting up of solar panels on barren lands
More Tejas types train to be introduced to connect iconic cities
100 more Airports to be developed by 2024
Proposed to states to replace old electric meters to the smart prepaid electric meters.
This will give flexibility to consumer to choose service provider.
INR 22,000 Crore proposed for power & renewal energy sector
Private sectors to built data centre parks throughout the country, policy may come soon
INR 6,000 Crore proposed for 'Bharat Net'
Funding for ideation and start up
INR 28,600 Crore proposed in this budget specific to women
Proposed to set up Indian Institute of Heritage & culture as a deemed university
5 Archeological sites would be developed as iconic sites with onsite museums
Setting up of Tribal Museum in Ranchi, Jharkhand
INR 2,500 Crore proposed for development of Tourism sector
Taxpayer's charter to be a part of statute to build confidence/trust
Government will ensure that citizens need not worry about tax harassment. There is a debate on building criminal liabilities for civil acts. Companies Act will be amended to correct this
India to host G20 presidency in 2022; INR 100 Crore allocated for preparation
Robust mechanism is in place to monitor health of all scheduled banks
Insurance cover for deposits increased from INR 1 lakh to 5 lakh
Universal pension coverage with auto enrollment to be introduced (through PFRDI) to every person
Invoice financing by NBFCs to MSME sector Amendments to be made in Factoring Act
Certain amendments to be made in SARFESI Act
Non residents can invest in certain Government securities
Liquidity constraints of NBFCs & HFCs will be addressed Government has taken steps from last year
International Bullion exchange to be setup in GIFT IFSC
LIC initial public offer will come to list on stock exchange; Government will sell part of its holding
Sitharaman unveiled plans for India's highways and railways, proposing Rs 1.7 trillion ($23.7 billion) for transport infrastructure that includes the accelerated development of highways and plans to monetize 12 lots of highway bundles.
Key infrastructure players like Larson & Toubro and KNR Constructions and IRB Infra look set to benefit.
The government's plan to encourage the manufacture of mobile phones, electronic equipment, and semiconductor manufacturing as well as medical devices will be positive for companies such as Dixon Technologies, Amber Enterprises, Subros, said Vinay Pandit, Head of Institutional Equities at IndiaNivesh.
The farm and rural sectors were allocated 2.83 trillion rupees, while the agriculture credit target for next year is set at 15 trillion rupees.
News of the government's proposal to expand fisheries and create 500 fish farmer producer organizations saw gains in Avanti Feeds, Apex Frozen Foods and Waterbase.
The minister announced that the rail service will be equipped with air conditioned freight cars and the government will provide viability gap funding for warehousing. Container Corporation of India Ltd is set to be the biggest winner off the move.
Sitharaman announced measures to help farm sector growth in water-stressed districts, helping to boost the shares of VA Tech Wabag Ltd., which designs and builds water and sewage treatment plants.
Shakti Pumps India Ltd. jumped the most in three-weeks on proposals to help farmers set-up standalone solar pumps to allow them to make a living out of their barren land.
The plan to provide piped water across Indian households by 2024 - with 3.6 trillion rupees in funding - means Jain Irrigation Systems Ltd., KSB Ltd., Kirloskar Brothers Ltd., JK Agri Genetics Ltd., PI Industries Ltd. could benefit.
The minister also announced 123 billion rupees for the Clean India mission.
The government is also further developing Bharat Net - or Bharat Broadband Network Ltd. - a program to bring broadband to villages. The government plans to provide 60 billion rupees for the project in the next fiscal year.
Education received significant attention in Finance Minister's budget speech, with the sector receiving 993 billion rupees in 2020-21.
The establishment of degree-level, fully-fledged online education programs to be offered by institutions who are ranked within the nation's top 100 will see online educators like National Institute of Information Technology and MT Educare benefit.
The announcement of a policy to allow the private sector to build data center parks has the potential to benefit all IT firms.
Pipeline & City Gas Suppliers
India plans to expands its national gas grid to 27,000 kilometers from 16,200 kilometers.
The government's plan to sell a part stake in Life Insurance Corp. triggered declines in shares of private insurers, which were star performers in 2019.
The finance minister stayed silent on infusing new capital into state-run banks for 2020-21. If the government doesn't inject fresh capital, it would be the first under Modi's five years in power.
Real Estate & Construction
Finance minister did not announce any specific measure for the sector, which had demanded measures to enhance credit availability for developers, an industry status and other measures that could propel sales.
The proposed cut in personal tax rates that will likely enhance purchasing power of middle class and continuation of tax sops for affordable housing announced in the budget failed to enthuse real estate stocks.
Finance Minister proposed balancing the use of chemical fertilizers with a change in incentives. She also announced a renewed focus on zero-budget farming which significantly cuts down on fertilizer consumption.
The delay in the country's long-awaited National Logistics Policy will be a disappointment for Key players