The Union Budget for the Year 2020-21 presented by Finance Minister appears that the budget is dream budget and game changer in Indian economy. This budget provides clear vision to Indian Economy.
As we know that our honourable Prime Minister set a target to achieve of USD 5 Trillion economy by 2024-25. Through this budget, Finance Minister made all efforts to achieve USD 5 trillion economy.
We can analyse this budget in two parts(A) Schemes and programmes (B) Finance bill.
Every stake holder is interested in Finance bill and curious to know how new Tax is beneficial for them and react accordingly. There are various changes and new benefits are provided in direct tax and Indirect tax. Due to following 3 tax benefits made in direct tax , India becomes most favourite destination globally for Investment and Manufacturing hub. These are as follows.
- 100% tax exemption of interest, dividend and investment made in infrastructure and notified sectors to Sovereign Wealth Fund of foreign Government.
- (i) Concessional corporate tax rate of 15% to the newly incorporated domestic companies in the manufacturing sector which start manufacturing by 31st March 2023.
(2) (ii) Concessional corporate tax rate of 15% to new domestic companies engage in the generation of Electricity.
(3) Removal of DDT ( Dividend distribution Tax)
Following are some other Major steps in Budget which provide trust between Government and other stakeholders.
- Simplification of Personal Income tax.
|Taxable slab||Existing Tax slab||New Tax Slab|
|2.5 to 5 Lakh||5%||5%|
|5 to 7.5 lakh||20%||10%|
|7.5 to 10 lakh||20%||15%|
|10 to 12.5 lakh||30%||20%|
|12.5 to 15 lakh||30%||25%|
|Above 15 lakh||30%||30%|
- Tax Audit limit increase from 1 crore to 5 crores to MSME.
- Faceless Appeals.
- Tax benefits to Start-ups in ESOP and increase turn over limit from 25 crore to 100 crores.
- Increase limit of FPI (Foreign portfolio Investment) from 9% to 15%