Finance Minister Nirmala Sitharaman on Saturday presented the Union Budget. In the longest Budget speech, the first full-time woman Finance Minister announced big relief to taxpayers by slashing income tax rates cut.
Here are the new tax rates
- 0 to Rs 5 lakh (No tax)
- Rs 5 lakh to Rs 7.5 lakh (10% tax)
- Rs 7.5 lakh to Rs 10 lakh (15% tax)
- Rs 10 lakh to Rs 12.5 lakh (20% tax)
- Rs 12.5 lakh to Rs 15 lakh (25% tax)
- Rs 15 and greater (30% tax)
Apart from tax relief, the government also announced that it will sell a part of its holding in LIC via an IPO. The nominal growth of GDP for 2020-2021 has been pegged at 10 per cent. The fiscal deficit target pegged at 3.5% of GDP.
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After the budget presentation, there is a general discussion on the matter. The proposals are then sent to the 24 Departmental Standing Committees of the Indian Parliament. They are then given almost a month to study the proposals.
Once the parliament reconvenes, all items under the Money bill are voted item by item and cleared. Once the Money bill has been cleared, the executive is authorized to withdraw money from the Consolidated Fund of India. The Parliament then has to clear the Money Bill.
The Lok Sabha has to clear the Money bill, otherwise, it will be deemed that the government has lost the confidence of the house and will have to resign. The budget proposals then come into effect.
2. Welfare spending cut back?
3. MSME push
4. Tweaks to DDT, LTCG
There are expectations that there may be cut in dividend distribution tax on shares and abolition of Long Term Capital Gains tax which had spooked the market 2 years ago, to boost savings and investment in the capital market. Everybody is expecting the FM to hit a boundary out of the stadium with this budget to revive the economy.
We will wait till Feb 1 to see the score.
(With Inputs from Anisha Nayar Dhawan)