2020 Union budget of India : On 1st February 2020, the Finance Minister of India Nirmala Sitharaman had presented a new Union budget that can help achieve a target of $5 trillion economy by the end of 2022. The Budget is said to improve the purchasing power of the people.
Credit to indianexpress.com ( image)
What is a Budget?
An estimate of income and expenditure of a financial year is called a budget. An Income Tax budget is an estimation of income from the taxation of people of a country.
What has happened in Budget 2020 of India?
The budget has proposed a new optional tax regime under section 115 BAC which proposes to bring about a change in the slab rates. You may switch to the new tax slab rate but once you choose it, you will not be able to switch back to the existing slab rate. Earlier the threshold limit for Ay 20-21 is Rs 2.5 lakhs which had not changed in the new regime. In the new income tax regime, the slab rates have been slashed down at the cost of foregoing of all exemptions and deductions. The new slab rates are:
| Up to Rs 2.5 lakh | Nil |
| Rs 2.5 lakh to Rs 5 lakh | 5% (Tax rebate of Rs 12,500 available under section 87A) |
| Rs 5 lakh to Rs 7.5 lakh | 10% |
| Rs 7.5 lakh to Rs 10 lakh | 15% |
| Rs 10 lakh to Rs 12.5 lakh | 20% |
| Rs 12.5 lakh to Rs 15 lakh | 25% |
| >Rs 15 lakh | 30% |
Here as it is seen, the slab rates for taxable income between Rs 5-7.5 lakhs has been slashed down to 10% whereas the slab rates from 10-12.5 lakhs has been slashed down to 20% from the regular 30%. The net tax up to an income of Rs 5 lakhs is Nil as an increased rebate of Rs 12500 is being offered. Also it is clearly evident that more slabs have been added to the new tax regime. The option to select a new tax regime can be opted before the due date of filing of income tax returns in AY 21-22.
Moving from income tax slabs to the TDS rate, The TDS rate under section 194J “Fees for professional or technical services” has been slashed down from 10% to 2% which is same as TDS u/s 194c “Payment to Contractors”
Another worth noting change is the increase in the tax audit limit for businesses from Rs 1 crore to Rs 5 crore provided gross receipts in cash are made not more than 5% of the turnover. For such taxpayers, the due date of Tax audit has extended from 30th September to 31st October. This has created a big issue for the Chartered Accountants as revenue from such audits contributed to their professional fees.
If you are a shareholder, you will have pay dividend at applicable slab rates. The concept of DDT has been done away with. Dividend paid on shares by the company exceeding Rs 5000 will be subject to TDS @ 10% u/s 194. Also u/s 80EEA, you will be able to claim Rs 1.5 lakhs for the next AY too.
A new section 234G has been inserted to charge a penalty of Rs 200 per day for default by the Universities, colleges, research associations or any other institution under section 35 of the Income Tax Act. Another new section that has been introduced in 2020 is section 194K regarding the deduction of TDS by mutual fund operators if the payment made to a resident person from the sale of mutual fund units exceeds Rs 5000 in a financial year.
Earlier start-ups with a turnover of Rs 25 crores were allowed deduction of 100% of its profits for consecutive 3 years in a 7 year period. Now this 7 year has been extended to 10 years and the turnover limit has been increased to Rs 100 crores.
What will be its future?
The future of the budget is bright for the normal taxpayers as well as the businessmen. It may not be favorable for people practicing various professions.
Conclusion
Is the Budget good or bad? The Budget may be bad for the Chartered Accountants but a relief for the businesses. The budget is in fact a cheer for both smaller and larger start-ups. For the commoners, both tax regimes may be good or bad depending upon the income earned by you. The Pros and cons of both regimes can be measured by practical calculations.
What has happened in Budget 2020 of India-Union budget of India
Enjoyed every bit of your blog article.Really thank you! Cool.
Hey, thanks for the article.Much thanks again. Fantastic.
Awesome post.Thanks Again.
Really appreciate you sharing this blog.Really looking forward to read more. Really Great.
Thanks for the blog post.Really thank you! Keep writing.
I value the blog article.Really thank you! Keep writing.
469066 880136Hi! Do you know if they make any plugins to safeguard against hackers? Im kinda paranoid about losing everything Ive worked hard on. Any tips? 468535
Appreciate you sharing, great blog.Much thanks again. Really Cool.
Im thankful for the post.Really thank you! Awesome.
Im grateful for the post.Really thank you!
Thanks for the blog article. Keep writing.
Im obliged for the article post.Really thank you! Fantastic.
Thanks for sharing, this is a fantastic article.Much thanks again. Really Great.
I truly appreciate this blog article.Thanks Again.
This is one awesome article post. Cool.
I am so grateful for your blog. Really Great.
Wow, great blog article. Great.
I really enjoy the blog article. Fantastic.
Muchos Gracias for your article. Thanks Again.
Fantastic post. Want more.
Really enjoyed this article post. Much thanks again. Want more.
I really liked your article. Really looking forward to read more. Cool.
Really enjoyed this article post.Really looking forward to read more. Much obliged.
Thank you ever so for you article post.Thanks Again. Great.
A round of applause for your blog article. Great.
I loved your article. Keep writing.
I truly treasure your piece of work, Great post.
Hi would you mind letting me know which webhost you’re using? I’ve loaded your blog in 3 completely different internet browsers and I must say this blog loads a lot faster then most. Can you suggest a good internet hosting provider at a reasonable price? Thanks a lot, I appreciate it!
882457 782318Howdy! I just wish to give a huge thumbs up for the fantastic information you might have here on this post. I will probably be coming back to your weblog for more soon. 574578
Every weekend i used to pay a visit this site, as i wish for enjoyment, as this this site conations truly pleasant funny information too.