BUDGET 2020 HIGHLIGHTS

REMOVAL OF EXEMPTIONS IN IT ACT
Out of 100 exemptions provided in I-T Act., 70 of them have been removed in the simplified regime. If exemption related insurance and ELSS removed then negative for Insurance and AMC

DIVIDEND DISTRIBUTION TAX
Removal of DDT will be beneficial for Holding company and Investor.

DISINVESTMENT
Government to divest part of its holdings in Life Insurance Corporation (LIC). Will help manage fiscal deficit target for FY21.
SECTOR : Finance, Banks

FISCAL DEFICIT
Fiscal deficit target for FY20 revised to 3.8% from 3.3%. Deficit pegged at 3.5% for FY21 as compared to 3.0% set under the FRBM act. Spending to boost economy.
SECTOR : Infrastructure Developers & Operators , Consumer Durables, FMCG

GOVT STAKE IN IDBI BANK TO BE PRIVATISED
Government proposed the selling off of government stake in IDBI Bank to private players.
SECTOR : Banks

DEPOSIT INSURANCE COVER
Deposit insurance cover will be hiked to Rs 5 lakh from Rs 1 lakh.

SMART METER
The prepaid meters will give freedom to give consumers to choose supplier and rate as per their requirement.
SECTOR : Power Infrastructure

NATIONAL GAS GRID
To Expand National Gas Grid from 16200 km to 27000Km.
SECTOR : Gas Distribution

TRANSPORTATION INFRASRUCTURE
Increasing budget allocation from Rs. 1.56 lakh cr. to Rs. 1.7 lakh cr.
SECTOR : Infrastructure Developers & Operators, Construction

ROAD CONSTRUCTION
Fast tracking of roads projects.
SECTOR : Construction

MOBILE MANUFACTURING SCHEME
FM proposes a scheme on encourage manufacturing of mobile phones, semi conductor packaging and electronic equipment.

ALLOCATION FOR JAL JIVAN MISSION
3.6lk cr allocated to Jal Jivan Mission.

RURAL ECONOMY
2.83 lakh cr. to be allocated for rural development, irrigation and agriculture.
SECTOR : FMCG

FISHING INDUSTRY
To expand fish production capacity to 200 lakh tones.

GOVT TO PROVIDE SOLAR PUMP
Total of 20 lakh farmers can set up standalone solar pumps. Further, government can help 15 lakh solarise grid-connected pump sets.

Major expectations from the Union Budget
Given recent slowdown in the economy there are expectations that the budget contain bold measures to boost the economy.
Personal Income tax
The Government can try and address the slump in consumer spending by providing tax breaks to the middle class which could be either by the way of restructuring the tax slabs or by increasing the limit of the deductions under Sec 80 C.
Housing
The Government is expected to continue it’s focus on affordable housing and we could see greater allocation under the Pradhan Mantri Aawas Yojna along with focus on execution. The Government could also increase the tax exemption limit on housing loan interest from current levels of ` 2 lakh. The Government could also look at expanding the scope of affordable housing by increasing the carpet area as well the ticket size.
Auto
The government is expected to announce measure to shore up the auto industry which was impacted by the credit crisis and implementation of BS6 norms from April 2020. There is very high probability that the Government will announce an incentive based scrappage plan in the budget which will benefit the sector, especially the MHCV space, which has been the worst impacted.
Make in India
In line with the recommendations made by the commerce ministry the Government can hike import duties on various items like paper, footwear, rubber items and toys as well as address the issues of inverted duty structure in certain sector like chemicals, furniture, rubber paper etc.
Abolotion of LTCG on equities
There are expectations that the Government may abolish LTCG on equities while definition of long term can also be changed from one to two years. There are also expectations that the Government might do away with the Dividend Distribution Tax DDT on equity given that the Government want to attract investments.
BUDGET TWEETS
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BUDGET FAQ'S

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What is a fiscal deflict?
This is the gap between the government's total spending and the sum of its revenue receipts and non-debt capital receipts. It represents the total amount of borrowed funds required by the government to completely meet its expenditure.
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What is the Union Budget?
The Union Budget is the annual report of India as a country. It contains the government of India's revenue and expenditure for the end of a particular fiscal year, which runs from April 1 to March 31. The Union Budget is the most extensive account of the government's finances, in which revenues from all sources and expenses of all activities undertaken are aggregated. It comprises the revenue budget and the capital budget. It also contains estimates for the next fiscal year.
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Direct tax
Direct tax is levied on individuals and corporations for incomes generated by them. For example, income tax, corporate tax.
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Disinvestment
The sale of government's shares in public sector undertaking is called disinvestment.
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What is a capital budget?
The capital budget is different from the revenue budget as its components are of a long-term nature. The capital budget consists of capital receipts and payments.
Capital receipts are government loans raised from the public, government borrowings from the Reserve Bank and treasury bills, loans received from foreign bodies and governments, divestment of equity holding in public sector enterprises, securities against small savings, state provident funds, and special deposits.
Capital payments are capital expenditure on acquisition of assets like land, buildings, machinery, and equipment. Investments in shares, loans and advances granted by the central government to state and union territory governments, government companies, corporations and other parties. -
Union Budget
A comprehensive report of the government's financial statements, containing all expenditures and revenues -- actual numbers for the year going by (revised estimates) and forecast numbers for the year ahead (budgeted estimates).
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Customs duty
It is a levy imposed on imports into, and exports out of a country, and are paid by the importer and exporter, respectively.
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What is fiscal policy?
Fiscal policy is a change in government spending or taxing designed to influence economic activity. These changes are designed to control the level of aggregate demand in the economy. Governments usually bring about changes in taxation, volume of spending, and size of the budget deficit or surplus to affect public expenditure.
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Fiscal deficit
When the government's receipts fall short of its expenditures, it borrows money to bridge the gap. The excess of total expenditure over (non-borrowed) receipts is called fiscal deficit.
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Indirect tax
Indirect tax is imposed on goods and services. For example, GST.
source credit : moneycontrol