Background: The Union Budget was presented on 1 February 2020. Vijay Shah, founder of Petals Professional Services shares his key takeaways from the budget.

This budget in my opinion is a structural budget and the reforms suggested are very practical and user-friendly. More thrust has been given to agriculture, rural development, wellness, education and skill development. The government has also announced a number of initiatives for industry, commerce and investment with infrastructure development. India is the fifth largest economy in the world the GDP is targeted at 10% for the coming year. The government is aiming for clean and corruption-free governance.

Digitalisation and smart cities

Government is targeting a digital revolution and accordingly major investment will be done in digitalisation. Right from the Municipal Corporation to Gram Panchayat shall be covered under the internet.  Private data centre parks shall be built and the details for this shall be announced soon. Five new smart cities shall be developed.

Investment clearance cell

Investment clearance cell shall be set up to facilitate investment and to provide advisory at central as well as state level. Investment clearance cell to be set up to provide end to end solution. 

MSMEs

‘Nirvik Scheme’ has been announced for the benefit of MSMEs, however broad outline shall be introduced shortly. 
 

Audit threshold limit for MSMEs is increased to INR 5 crore.

MSME entrepreneur shall be given an extension of invoice financing through TReDS and also a new scheme for subordinate debts and scheme for supporting export markets shall be announced through EXIM Bank and SIDBI, for selected group of commodities.

National Logistics Policy (much awaited) is announced however modalities to be launched soon. 
 

Export and imports

Special move and thrust will be given to develop each district as an Export Hub.

100 more airports shall be developed under UDAAN scheme. At least two or three major ports shall be corporatized very soon.

Entire Rules of Origin are under review and shall be digitalised very soon.

Certain products which are of labour oriented or directly related to MSME Basic Custom Duty has been enhanced.

Certain special exemption under import policy has been withdrawn details shall be published soon by way of Notification.

Furniture, footwear, medical equipment and likewise product shall be facing enhancement in Import duty.  

Detail Indirect Taxes notification relating to import and exports published and details can be obtained from  www.cbic.gov.in.

Much awaited New Tax remission Scheme shall be finalised during this year i.e. Prior 31 March 2020. Modalities yet to finalised, wait for notification.

Skill development

For specialised diploma in different sectors, 150 new universities and 3000 skill development centres shall be set up by March 2021.
 

Knowledge translation cluster, scaling of technological cluster and quantum technologies have been announced. 

Taxation

New slabs announced for Personal Income Tax.

New Income tax slab announced are voluntary and these slabs have no exemptions can availed, except EPFO, NPS...

More than 70 exemptions / deductions have been reviewed, reformed or deleted. 

Likewise, ‘Sub ka Vishwas’ scheme in Indirect Tax has been announce for Direct Tax “Vivad se Vishwas” has been announced. Benefit under scheme can be availed till 30 June 2020. To qualify for the benefit under said scheme need to approach department with required data on or before 31 March 2020. For applications filed after 1 April 2020 till 30 June 2020  shall  be considered with  10% additional amount over and above the limit specified. 

Effective 1 April 2020 simplified new income tax return form for a small taxpayer shall be announced and faceless appeal reform will be implemented soon.

‘Taxpayer chartered’ announced for the benefit of taxpayers.

Concessional Corporate Tax has been announced at 15% for new domestic company in manufacturing and power sector. 

For co-operatives, the concessional tax rate has been proposed.

Tax benefit has been proposed for startups, accordingly period and turnover cap enhanced.

Also read: Budget impact on direct taxes

Other notable highlights

Special scheme announced for manufacturing of electric equipment, semi-conductor packaging as well Mobile phone. 

150 new passenger trains in line with ‘Tejas’ will be operated soon 
 

National Gas grid shall be expanded by 27,000 KMs.

Special thrust and budget allocation allocated for Agriculture and for a ‘Caring Society’. 

Opportunity to invest in building, warehousing and develop tourism sector, is the key for the MSME entrepreneur.
 

For the development of marine products special cell shall be set up and suitable modification shall be reviewed in rules.

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