The Finance Minister said that the government has decided to sell off a part of its holding in LIC through an IPO.
Finance Minister Nirmala Sitharaman has presented Union Budget 2020-21 in the Parliament today. It has come at a time when India is facing economic slowdown and every sector in the country was expecting incentive from the government to boost overall demand.
Here's a look ten takeaways from her speech on Union Budget 2020-21.
1. New and reduced tax slabs for income up Rs 15 lakh
Finance Minister Nirmala Sitharaman 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.
The new tax regime will be optional and the taxpayers will be given the choice to either remain in the old regime with exemptions and deductions or opt for the new reduced tax rate without those exemptions. There will be no tax for people earning up to Rs 5 lakh, she said while unveiling the Budget 2020-21.
The FM said that currently more than 100 exemptions provided in I-T Act. Now around 70 of them have been removed in the simplified regime. Remaining will be reviewed over the coming years to simplify the system.
2. Insurance cover for bank depositors raise to Rs 5 lakh:
The Finance Minister proposed to increase the insurance cover for bank depositors to Rs 5 lakh from the existing Rs 1 lakh. According to existing RBI rules, in case of a bank failure, each depositor is insured up to a maximum of Rs 1 lakh for both principal and interest amount.
3. Govt to sell stake in LIC:
Finance Minister Nirmala Sitharaman Sitharaman Sitharaman has said that the government will sell a part of its holding in Life Insurance Corporation of India (LIC) through an initial public offering (IPO). The government owns 100 per cent of LIC.
4. Hike in Defence Budget:
Defence budget has been hiked by 6% from Rs 3.18 lakh crore to Rs 3.37 lakh crore. With defence pensions, the total budget would go upto Rs 4.7 lakh crore.
5. FPI limits in corporate bonds raised to 15%:
Foreign Portfolio Investment (FPI) limits in corporate bonds being raised from 9 per cent to 15 per cent is a major move. That, along with fiscal deficit not being allowed to spiral much, should help prevent domestic interest rates from going up.
6. New education policy
The government will announce a new education policy soon. Finance Minister Nirmala Sitharaman Sitharaman says the government will take steps to rope in External Commercial Borrowing (ECB) and Foreign Direct Investment (FDI) route to develop higher quality education. The government has proposed an allocation of Rs 99,300 crore for the education sector and Rs 3,000 crore for skill development in FY21.
7. Setting up hospitals using tax money on medical devices
The government proposes setting up viability gap funding to allow for entry of hospitals into aspirational districts through the PPP model. Proceeds from taxation of medical devices to be used to fund these projects.
8.100 new airports to be developed:
Nirmala Sitharaman Sitharaman Sitharaman in her speech said 100 more airports will be developed by 2024 to support the UDAN scheme. Presenting the Budget for 2020-21, Sitharaman said Rs 1.7 lakh crore has been provided for transport infrastructure in 2020-21. She also said 150 trains will run under the public private partnership (PPP) mode, also four stations will be redeveloped with the help of the private sector.
A Chennai-Bangalore expressway will come up soon.
9. Govt to aid entrepreneurs
Individuals will be offered assistance in funding as well and investment clearance cell will be set up for this purpose. The effort is intended to boost entrepreneurship and small business as it has been realised that the handholding schemes have not taken off as intended.
10.Vivaadh sey Vishwas Scheme announced:
The Finance Minister has announced the 'Vivaadh sey Vishwas Scheme' for direct tax payers 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.