Union Budget 2020-21 : New regime of personal income tax

Finance Minister Nirmala Sitharaman presented the Union Budget in Lok Sabha today. She said under the new personal income tax regime, individual taxpayers will pay tax at a reduced rate of 10 percent for income between 5 lakh and 7.5 lakh rupees.

For income between 7.5 lakh rupees and 10 lakh rupees, tax rate will now be 15 percent against the current 20 percent. The new tax rate will be 20 percent, down from 30 percent now for income between 10 lakh rupees and 12.5 lakh rupees.

For income between 12.5 lakh rupees to 15 lakh rupees, the rax rate will be 25 percent. Income above 15 lakh rupees will continue to be taxed at 30 percent.

The Finance Minister said substantial tax benefit will accrue to individual taxpayers under the new personal income tax regime. Those earning up to Rs 5 lakh in a year will pay no tax.

The Budget has proposed a 16-point action plan to boost agriculture and farmers’ welfare and doubling farmers’ income by 2022. It also seeks to double farmers’ income by 2022. Finance Minister said, the budget is aimed at boosting the income of people and enhancing their purchasing power.

Comprehensive measures for 100 water-stressed districts have also been proposed in the Budget. Meanwhile, the agricultural credit target has been set at 15 lakh crore rupees.

Twenty lakh farmers will be provided funds for setting up standalone solar pumps. Farmers will also be allowed to set up solar units on barren and fallow lands and supply power to grids. Youth and fishery extension work will be enabled by rural youth as Sagar Mitras, forming 500 fish farmer producing organizations.

Ms. Sitharaman said, Indian Railways will set up Kisan Rail through PPP arrangement for transportation of perishable goods. She added that Krishi UDAN will be launched by the Civil Aviation Ministry on international and national routes.

It will improve value realization in the North East and tribal districts. The Finance Minister further said, financing on Negotiable Warehousing Receipts will be integrated with e- National Agricultural Market.

NABARD Refinancing Scheme will be further expanded, and agri credit target for the year 2020-21 has been set at 15 lakh crore rupees.Budget 2020 provides an additional 69,000 crore rupees for the health sector.

The Finance Minister proposed to expand Jan Aushadhi Kendras in all districts of the country to provide medicines at affordable rates. She announced a 99,300 crore rupee outlay for the education sector in 2020-21 and 3,000 crore rupees for skill development.

She announced that a degree-level full-fledged online education programme will be offered by the top 100 institutions in the country.

Further, she said, Urban local bodies across the country will provide internships for young engineers for a period of up to one year. External commercial borrowings and FDI will be leveraged to improve the education system.