Union finance minister Nirmala Sitharaman has revised the income tax slab in the Union Budget 2020. In the Budget announcement, Nirmala Sitharaman proposed to bring a simplified personalised income tax scheme for those who forego deductions.
"The new tax regime will be optional and the taxpayers will be given the choice to either remain in the old regime with exemptions and deductions or opt for the new reduced tax rate without those exemptions," Sitharaman said while unveiling Budget.
According to the proposal, if the total income of an individual falls in the bracket of Rs 5 lakh- Rs 7.5 lakh, 10 percent tax will be payable. For individuals earning Rs 7.5 lakh to Rs 10 lakh, the tax will be deducted at the rate of 15 percent, against the existing 20 percent. For individuals earning between Rs 10 lakh to Rs 12.5 lakh, the tax rate payable will be 20 percent, Sithraman proposed.
In an interview to CNBC-TV18's Shereen Bhan, Rajiv Memani, chairman - India Region at EY and Member of DTC Task Force; Vikram Kirloskar, president of CII and VC at Toyota Kirloskar Motor; Ajay Singh, CMD of SpiceJet; Vinayak Chatterjee, chairman and co-founder of Feedback Infra gave their take on Nirmala Sitharaman's union budget 2020 and their outlook on the road ahead.
According to Memani, government's incentive mechanism will hurt salaried employees, who were availing insurance to housing to standard deductions and everything else.
As per Memani, when the government reduce the number of exemptions for income tax, it doesn't complicate but simplifies the system, "If you globally, India is probably one of the few jurisdictions where you have so many exemptions."
"Generally, the government is moving the fiscal deficit a little back and there is a lot more spending which is planned in infrastructure, agriculture. I think all the agricultural spend they have planned, it looks very encouraging. When we talk with the FM and the government before the budget, there was a lot of talk about the trust deficit that exists and I think that they are trying to address it in various ways," Kirloskar said.
Singh said, "UDAN is, of course, one of the most successful schemes of the government of India. In the last two years, more than 50 airports have been added to the aviation infrastructure of our country. To add 100 more airports to that by 2024 certainly is a big positive. Krishi UDAN is something that SpiceJet had been trying to do, trying to get farm produce, fruits and vegetables take them to Hong Kong, take them to Dubai."
Chatterjee said, "A large portion of the thrust of the budget stated and unstated is spends on infrastructure. We had said that our expectation is that it will be slanted towards rural infrastructure and that happened. A large portion of the budget is towards irrigation and water."
"However, the big elephant in the room so far as infrastructure is concerned is that she spent some time explaining the National Infrastructure Pipeline. We know that it's Rs 102 lakh crore and if you take a very simplistic model, it is about Rs 20 lakh crore per annum. If you do a complete detailing of the union budget plus the state budgets and funding sources, you will come to the conclusion that even with this budget the funding available is at a stretch about Rs 10-12 lakh crore. So, the union budget has a Rs 5-8 lakh crore hole in infrastructure financing and this issue has not been addressed properly," he added.