Budget 2020 income tax expectations: Salaried class wants relief, but can Modi government deliver?

By: |
New Delhi | Published: January 4, 2020 1:37:53 PM

Budget 2020 India Income Tax expectations: In the Interim Budget, presented in February last year, an income tax relief was provided that primarily benefitted individuals with an annual income below Rs 5 lakh.

budget 2020, budget 2020 India, budget 2020 expectations, budget 2020 21, budget 2020 news, budget 2020 suggestions, budget 2020 income taxBudget 2020 Income Tax expectations: During the ongoing fiscal, the GDP growth rate slumped to a 6-year low of 4.5 per cent in the second quarter.

Budget 2020 Income Tax expectations: With less than a month to go for the crucial Union Budget 2020, the salaried class is expecting a major income tax relief from Union Finance Minister Nirmala Sitharaman. The hopes are high after the Narendra Modi government decided to go for a corporate tax cut in September 2019. While the middle class wants the Modi government to provide income tax relief, FM Sitharaman has a very little fiscal room to dole out such largesse, as per a PTI report.

The central government has been facing tough questions over the current economic situation of the country. Apart from this, the Central government’s decision to cut the corporate tax rate has dented its coffer by Rs 1.45 lakh crore. The government also took a bold decision of lowering Goods and Services Tax (GST) rates on items like outdoor catering, hotel accommodation, diamond job work, electric vehicle, and housing. Both of these rate cuts and shrinking consumption may translate into the shortfall in revenue targets, as per the news agency’s report.

Watch Video: What is Union Budget of India?

Fulfilling the demands of overseas investors, FM Sitharaman had rolled back enhanced surcharge on foreign portfolio investors levied in the full-fledged India Budget presented in July. The central government also withdrew surcharge on long and short term capital gains arising from the transfer of equity shares, PTI reported. The central government also decided to do away with the ‘angel tax’ for entities registered with the Department for Promotion of Industry and Internal Trade (DPIIT).

During the ongoing fiscal, the GDP growth rate slumped to a 6-year low of 4.5 per cent in the second quarter. The central government is battling with a six-year low economic growth as well as a 45-year high unemployment rate.

In the Interim Budget, presented in February last year, an income tax relief was provided that primarily benefitted individuals with an annual income below Rs 5 lakh. In another relief for salaried class, standard deduction of Rs 40,000, which was introduced in the Union Budget 2018, was raised by Rs 10,000 to Rs 50,000 per year.

The salaried class expecting big Income Tax relief in the upcoming Union Budget 2020-21 must keep in mind the above mentioned factors.

Do you know What is Finance Bill, Short Term Capital Gains Tax, Fiscal Policy in India, Section 80C of Income Tax Act 1961, Expenditure Budget? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Next Stories
1Budget 2020: Telecom sector expects cut in levies, generous Union Budget from FM Sitharaman
2Budget 2020: Will real estate sector get some respite; here are some recommendations
3Budget 2020: Remove GST, increase tax benefit on health insurance premium of senior citizens to Rs 1 lakh – Expectations