Budget 2020: Date, time and top 5 expectations of middle class from Narendra Modi Government
Budget 2020 Expectations: Amid speculation of income tax relief to the middle class, Nirmala Sitharaman is going to present her second Union Budget on 1st February 2020.
Budget 2020 Expectations: Amid speculations of income tax relief to the middle class, Nirmala Sitharaman is going to present her second Union Budget on 1st February 2020. In this budget, the Narendra Modi Government has dual challenges — first, they need to meet the aspirations of the middle class, second, they have to boos the Indian economy through more liquidity. In fact, this time the Modi Government is facing some pressure from the stock market also as the Indian indices have been trading at its all-time high on market-friendly union budget hopes.
Budget 2020 Schedule
The Budget Session of the Parliament will commence on 31st January 2020 at 11 AM with a joint session of both Lok Sabha and Rajya Sabha is presided over by the President of India Ram Nath Kovind. The President will address the joint session of the parliament in 31st January. Chief Economic Adviser KV Subramanian is likely to table the Economic Survey of India in the upper house on the same date. Finance Minister Nirmala Sitharaman will present the Union Budget 2020 on 1st February 2020 at 11 AM, says the Lok Sabha calendar. Since 2017, the Railway Budget has been merged with the Union Budget, both union and railway budget will be presented on 1st February 2020. Usually, Parliament and stock market remain closed on Saturday but on February 1st being Saturday, both Parliament and the stock market will remain open.
See Zee Business Live TV streaming below:
When there is a budget there would be expectations as well. Here are the top 5 Budget 2020 Expectations:
1] Change in income tax slab: The middle-class taxpayers may have something to cheer in this Budget. Income up to Rs 5 Lakhs would not be taxed. If you have an annual income between Rs 5 Lakh to Rs 10 Lakh, you could be taxed at 10 per cent instead of 20 per cent. If you earn Rs 10 Lakhs to Rs 20 Lakhs, you could be taxed at 20 per cent instead of the current 30 per cent.
2] Increase in tax benefit under NPS: You currently enjoy a tax deduction of Rs 50,000 a year under Section 80CCD(1B) of the income tax act for contribution to NPS. You could see a doubling of the tax benefit under the NPS from Rs 50,000 to Rs 1 Lakh a year. Pension regulator PFRDA has already sent its proposal in this regard to the Narendra Modi Government.
3] Removal of LTCG on equity investments: The Government wants to promote equity as an inflation-beating investment for the long term. The introduction of long term capital gains tax of 10 per cent on equities in Union Budget 2018-19 was a shocker as LTCG was introduced after 14 years. LTCG up to Rs 1 Lakh is exempt. The Indian investor has found taste in mutual funds after demonetization and prefers to invest in mutual funds through SIPs. The growth in SIPs has come down since pre-LTCG days. There still is a sizeable difference between equity returns and those from fixed-income instruments in spite of this LTCG tax.
4] Increase in Section 80C tax benefit: There is a need to increase income tax exemption under Section 80C as it was last increased in August 2014 when the PPF limit was raised from Rs 50,000 to Rs 1.5 lakh. Its impact on household savings was enormous. During FY15 over FY14, Provident and Pension Funds increased by merely Rs 13,000 crore but during FY16 over FY15, it increased by more than Rs 1 lakh crore. We believe that an increase in PPF limit by Rs 1 lakh to Rs 2.5 lakh for individual households under 80C will lead to additional savings of more than Rs 2 lakh crore compared to the revenue foregone of Rs 23,000 crore. Even we add up the extra interest burden of around Rs 17,000 core (@ 8.5% on Rs 2 lakh crore), the total revenue foregone is only Rs 40,000 crore compared to Rs 2 lakh crore jump in savings (incentive saving multiplier is at least 5 times more!)."
5] Increase in home loan interest deduction: The government may also increase the exemption limit of interest payments under housing loan by Rs 1 lakh to Rs 3.0 lakh for existing home loan buyers. There are around 75 lakh home loan buyers in the country, so the increase in home loan interest deduction from Rs 2 lakh to Rs 3.0 lakh will benefit them. This will cost the Government around Rs 15000 crore.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.