Upcoming Union Budget 2020
Shri Nirmala Sitharaman, the Finance Minister of India will be presenting her second Union Budget on February 1, 2020. There has been a lot of expectation from this budget. Industries and Individual taxpayers are expecting to have some favorable things in the budget.
There has been hustling-bustling among the government officials since past few months in the budget preparation exercise. The Finance Ministers and her team must have sleepless nights for quite some time now. The have hold numerous meetings with industry experts, industrialists, consultants, bankers etc. It has also been noted that Prime Minister Narendra Modi is personally taking interest in the budgeting exercise this time which is quite rare. The PM also held various meetings focused primarily on budget. The year 2019 went very challenging for Modi-led Government. The Indian economy is all bruised. All the sectors are suffering and there is a JOBLESSNESS everywhere. The sluggish economy has been giving all the hard times to the government. This budget has to do some miracles to kick start the Indian economy afresh.
India has been witnessing the worst economic slowdown ever. The industries (both manufacturing and service) are bleeding especially automobile and real estate, the shadow banking has turned hostile. The NBFC crisis is at its best. The fiasco of IL&FS and PMC have been pinching a lot. And top of that, home financier DHFL has made the news since a couple of weeks to go bankrupt. The government has been doing its best to improve the health of the economy, however the sluggish economy isn't naming to improve that easily.
On February 1, 2020, all eyes will be on the Budget. There are lot of expectations from Nirmala Sitharaman that her budget will be a game changing for the ailing Indian Economy. She will fix the problems. The government has already taken the measure by reducing corporate income tax to boost the economy, the government has also announced 25000 Crore stress fund for Construction Industry. In Budget 2019, it also increased rebate limit for individual tax payers whose net taxable income is up to Rs. 5 Lakh.
Five Things I Am Expecting From The Budget Which Affect Common Man:
1. Long Term Capital Gain (LTCG) on Equity and Mutual Funds : Presently, LTCG on sale of equity shares and mutual fund above INR 1 Lakh is subjected to tax @10%. This tax was introduced by her predecessor Arun Jaitley after the gap of 14 years. This was an unwelcome move for market players. This reform has been hurting investors even today. It is expected that LTCG on sale of equity and mutual funds shall be abolished again. If this tax is abolished, there will be significant improvement and inflow of funds in the share market. It will be a big relief.
2. Slashing Personal Income Tax Rate : In Budget 2019, the rebate is increased for small tax payers. Now, it's time for rich individual tax payers to be rewarded. After corporate tax rate cut, the speculations are rife that personal income tax rates for rich individual tax payers shall be slashed. This measure will leave little more in the hands of taxpayers which can further be spent and submerged in the economy.
3. Dividend Distribution Tax (DDT): By slashing Corporate Tax Rate, the government has already proved that it doesn't hesitate to take bold steps to cure the ailing economy. In the similar line, it is expected that the government may take yet another bold step to abolish Dividend Distribution Tax. This will be a big relief and welcoming move for corporates and investors. But, to bring such reform, the FM must have the extra guts. There is probable revenue loss for the government exchequer.
4. Increasing limits under Section 80C : Presently, the tax saving investment limit is INR 1.5 Lakh which is stagnant since many years. I wish it is raised to INR 2.5 Lakh at least. This reform will fetch more money to government which ultimately will be used for curing the economy. On the other hand, the individual tax payer shall save little extra tax. It's win-win situation for both.
5. Increase in home loan interest : Presently, home loan interest up to INR 2 Lakh can be claimed. The remaining has to be carried carried forward which ultimately lapses. The end result is loss to the tax payer. This limit should be increased. This measure shall generate demand for more homes and ultimately real estate sector will be pushed. And the real estate sector drives the growth for cement, steel, labour etc.
We will have to wait and watch what our Finance Minister delivers tomorrow. I will write key highlights of budget in simple and understandable words.
Thank you for reading...Jai Hind
There has been hustling-bustling among the government officials since past few months in the budget preparation exercise. The Finance Ministers and her team must have sleepless nights for quite some time now. The have hold numerous meetings with industry experts, industrialists, consultants, bankers etc. It has also been noted that Prime Minister Narendra Modi is personally taking interest in the budgeting exercise this time which is quite rare. The PM also held various meetings focused primarily on budget. The year 2019 went very challenging for Modi-led Government. The Indian economy is all bruised. All the sectors are suffering and there is a JOBLESSNESS everywhere. The sluggish economy has been giving all the hard times to the government. This budget has to do some miracles to kick start the Indian economy afresh.
India has been witnessing the worst economic slowdown ever. The industries (both manufacturing and service) are bleeding especially automobile and real estate, the shadow banking has turned hostile. The NBFC crisis is at its best. The fiasco of IL&FS and PMC have been pinching a lot. And top of that, home financier DHFL has made the news since a couple of weeks to go bankrupt. The government has been doing its best to improve the health of the economy, however the sluggish economy isn't naming to improve that easily.
On February 1, 2020, all eyes will be on the Budget. There are lot of expectations from Nirmala Sitharaman that her budget will be a game changing for the ailing Indian Economy. She will fix the problems. The government has already taken the measure by reducing corporate income tax to boost the economy, the government has also announced 25000 Crore stress fund for Construction Industry. In Budget 2019, it also increased rebate limit for individual tax payers whose net taxable income is up to Rs. 5 Lakh.
Five Things I Am Expecting From The Budget Which Affect Common Man:
1. Long Term Capital Gain (LTCG) on Equity and Mutual Funds : Presently, LTCG on sale of equity shares and mutual fund above INR 1 Lakh is subjected to tax @10%. This tax was introduced by her predecessor Arun Jaitley after the gap of 14 years. This was an unwelcome move for market players. This reform has been hurting investors even today. It is expected that LTCG on sale of equity and mutual funds shall be abolished again. If this tax is abolished, there will be significant improvement and inflow of funds in the share market. It will be a big relief.
2. Slashing Personal Income Tax Rate : In Budget 2019, the rebate is increased for small tax payers. Now, it's time for rich individual tax payers to be rewarded. After corporate tax rate cut, the speculations are rife that personal income tax rates for rich individual tax payers shall be slashed. This measure will leave little more in the hands of taxpayers which can further be spent and submerged in the economy.
3. Dividend Distribution Tax (DDT): By slashing Corporate Tax Rate, the government has already proved that it doesn't hesitate to take bold steps to cure the ailing economy. In the similar line, it is expected that the government may take yet another bold step to abolish Dividend Distribution Tax. This will be a big relief and welcoming move for corporates and investors. But, to bring such reform, the FM must have the extra guts. There is probable revenue loss for the government exchequer.
4. Increasing limits under Section 80C : Presently, the tax saving investment limit is INR 1.5 Lakh which is stagnant since many years. I wish it is raised to INR 2.5 Lakh at least. This reform will fetch more money to government which ultimately will be used for curing the economy. On the other hand, the individual tax payer shall save little extra tax. It's win-win situation for both.
5. Increase in home loan interest : Presently, home loan interest up to INR 2 Lakh can be claimed. The remaining has to be carried carried forward which ultimately lapses. The end result is loss to the tax payer. This limit should be increased. This measure shall generate demand for more homes and ultimately real estate sector will be pushed. And the real estate sector drives the growth for cement, steel, labour etc.
We will have to wait and watch what our Finance Minister delivers tomorrow. I will write key highlights of budget in simple and understandable words.
Thank you for reading...Jai Hind
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