Budget 2020: Critical Analysis
1. Inverse duties have been doubled so many commodities would get costlier and instead of saving money would have a bad impact on savings.
2. Tax slab break up in no way seems simplification to providing any benefit to middle class. Further it may rather demoralise housing, mutual funds and insurers.
3. Dividends Distribution tax which was charged from the companies at 15% would now be charged from individuals at applicable slab rate. But, it impacts our tax revenue by 25k crores. Corporate (whose corporate tax is already slashed) and rich promoters benefit out of it. We working class individuals got zero benefit in the meanwhile. If an individual pays for purchasing stocks and is getting dividend he will pay according to tax slabs but for corporate houses it was flat 15%. Probably that makes a difference. As working class we get 0 benefit.
4. In real estate earlier if consideration value was lower than circle rate by 5% then the buyer used to be charged at applicable slab rate and seller at capital gain tax which has been put 10% now but in my opinion it is going to change nothing as states would raise circle rate to get fax benefit.
Budget 2020 Critical Analysis
5. If an NRI is not paying tax in any country he/she would be treated as indian resident. So it is to be seen if people in UAE despite attaining their citizenship would have to pay tax in India. Government should clarify about it because despite the fact that it should have zero impact on them they are liable to litigations as “liable to tax” but overall it is probably a good step to reverse brain drain. USA has implemented that already. Also an Indian citizen, who is not taxed elsewhere in the world for whatever reason and also not taxed in India because not being present in India for more than 120 days, will now be taxed in the country. This will hit those who have moved out of India to tax havens, but have not yet got their foreign citizenship”.
So one can obtain tax residence certificate by living in UAE but the criteria of days itself has been changed to 245 days further the clause itself says if one is not having citizenship in UAE then he is liable to tax and getting citizenship in UAE isn’t so easy. If a person who is NRI and is living in countries like UAE which are tax free zone, will he be liable to litigation in India because ultimately he hasn’t paid tax to any country? The government needs to clarify.
6. Extending tax holidays by one more year may boost affordable housing.
Budget 2020 Critical Analysis
7. Tax on ESOPs has been deferred by 5 years may give boost to entrepreneurs. Though the entrepreneurs have demanded complete removal of it. Further 1% tds on e commerce companies which are major entrepreneur segments is not enthusiastic move. ESOPs have dual taxation once when converted to shares and second when shared are sold off. This dual taxation was also not addressed in the budget. As of today only 200 start ups come under Esops. ESOPs can be a good tool to promote entrepreneurship but that’s has been missed.
8. 100% tax exemptions on sovereign wealth funds of other countries may further boost the priority sector.
9. Increasing DICGC limit from 1 lakh to 5 lakh is a good measure to enhance trust in banking system.
10. For MSME except relief in auditing provisions I found nothing.
Is BJP trying its best to prove that Rahul Gandhi is correct in saying that theirs is a suit boot Sarkar? Further people can give their feedback factually.
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