Key Highlights of Budget 2020
Feb 24, 2020 Real Estate News
On February 1, 2020, the Finance Minister, Nirmala Sitharaman presented the budget for the year 2020-21 and announced sops, tax breaks, the major push towards the youth employment and youth-centred programs. The Budget 2020 was themed around ‘Ease of living’, and the Finance Minister estimated growth of 10 percent GDP for the year 2020-21. The total expenditure for this year’s budget is Rs 30.4 lac crore.
We discuss the key highlights of the budget here:
We discuss the key highlights of the budget here:
- Big gains on affordable housing: Modi government has been making several efforts to boost the ‘Housing for All by 2022’ agenda. To boost it further, the FM announced that the additional deduction of Rs 1.5 lacs for the interest paid on the home loan of the affordable housing would be extended to another year. Earlier the deduction was allowed till March 31, 2020. The FM also announced tax holiday to the developers on profits earned by affordable housing till March 31, 2021. This is expected to boost the supply of affordable homes in the coming year. The FM has also announced the allotment of Rs 27,500 crore for the PMAY scheme, marginally more as compared to last year.
- Relief in real estate transactions: The real estate sector has been demanding the rationalization of the gap in consideration value and circle rate for a long time. This year the demand has been granted by the FM. The difference between the circle rate and consideration value has been increased from 5 percent to 10 percent.
- Direct Simplified Tax: The FM has announced a new and simplified IT regime allowing the taxpayers to comply with IT laws without professional help. The new tax regime is optional and will be applicable only for those who forgo certain deductions and exemptions. The FM has also removed 70 out of 100 exemptions and deductions of different nature in the IT Act.
| Income Slab | Existing Rate | New Rate |
| Up to Rs 2.5 lacs | Exempt | Exempt |
| Rs 2.5 – 5.0 lacs | 5% | 5% |
| Rs 5 - 7.5 lacs | 20% | 10% |
| Rs 7.5- 10 lacs | 20% | 15% |
| Rs 10 – 12.5 lacs | 30% | 20% |
| Rs 12.5 – 15 lacs | 30% | 25% |
| Rs 15 lac and above | 30% | 30% |
- Proper connectivity: In budget 2020, the FM announced that the development of roads and railways to provide better and faster connectivity which includes the construction of 2500 km access-controlled highways, 9000 km of economic corridors, 200 km of strategic highways. Emphasis was laid on the development of Delhi- Mumbai Expressway and Chennai- Bengaluru Expressway to be completed by 2023.
- Proper infrastructure: For Swachh Bharat Mission, Rs 12,300 crore has been allocated under which major focus will be laid on the liquid and greywater management, solid waste collection, source aggregation and processing. Rs 3.36 lac crore has been allocated to Jal Jivan Mission which aims at providing clean water to everyone.
- Employment generation: The government announced that the new education policy would be announced soon. To provide good higher-level education to the deprived section, the government has proposed to start degree level full-fledged online education programs which will be provided by top institutes.
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