Budget 2020: What Does It Mean For Your Family?

In this article, We will take a look at the main points and how India’s Budget 2020 will affect you and your family in India. The whole country was eagerly waiting for the details of the recent Budget 2020 announcement by the Finance Minister, Smt. Nirmala Sitharaman.

Every person or family has a unique set of financial circumstances, and for this reason, any budget is a very arbitrary thing for anyone. What is good news for one person may be bad news for another.

Budget 2020: How Does It Affect Families?

Our experts had a look at the main points of the Budget and how Budget 2020 will affect families in India.

Union Finance Minister Nirmala Sitharaman on 1st February 2020 presented India’s Union Budget for 2020-21. Here are the key highlights:

Personal Tax – Lower Slab Rates

The Government has provided an optional lower rate of income tax to individuals, the finance minister in her Budget for 2020-21 proposed new lower IT tax slabs of 15% and 25% in addition to the existing 10%, 20% and 30%.

The new I-T slabs would be for individuals not availing certain specified deductions or exemptions.

Income	Tax Rate
income up to 2.5 lakhs	No tax
income between 2.5-5.0 lakhs	5% income tax rate
income between 5 -7.5 lakhs	10% income tax rate
income between 7.5-10 lakhs	15% income tax rate
income between 10 -12.5 lakhs	20% income tax rate
income between 12.5-15 lakhs	25% income tax rate
Incomes above 15 lakhs	remain at 30%

However, to avail this new tax scheme, which is optional, taxpayers will have to let go of more than 70% exemptions including under Section 80C and 80D, LTC, housing rent allowance, deduction for entertainment allowance, professional tax, and interest on self-occupied/vacant property.

Skill & Education

As per Budget 2020, government proposed to provide about Rs 99,300 crore for the education sector in 2020-21 and about Rs 3,000 crore for skill development.

In order to provide quality education to students from the deprived sections of the society as well as those who do not have access to the higher education finance minister Sitharaman proposed to start degree level full-fledged online education program.

About 150 higher educational institutions will start apprenticeship embedded courses.

• The Finance Minister also proposed a special bridge course to bring in equivalence and improve the skill-sets of teachers, nurses, paramedical staff and caregivers.
• Government also a national police university and a national forensic science university in the domain of policing science, cyber forensics, and forensic science.

Good news for home buyers

In a cheer for home buyers, the central government has extended additional Rs 1.5 lakh benefit on interest paid on housing loan till March, 2021

Dividends

Dividends become taxable in your, dividend recipients hands, your taxable income will increase. Earlier this tax was paid by the companies who were giving dividends to the investors.

Insurance on Bank Deposit

Another good news for families with Saving Accounts considering how Punjab and Maharashtra Cooperative (PMC) Bank customers faced issues after the Reserve Bank of India (RBI) restrictions were placed on the bank. Finance Minister Nirmala Sitharaman in the budget increased the bank deposit insurance cover to Rs 5 lakh from existing Rs 1 lakh.

there were a lot of other changes announced by the government in the budget, refer to full Budget 2020 for more information