Union Budget 2020: All eyes are on Finance Minister Nirmala Sitharman who is set to present the Budget 2020 today. There is a host of expectations from the minister who is likely to announce a slew of measures to tackle the slowing economic growth and boost consumption. One of the measures that is expected from the minister is a change in the tax slabs so that there is an increase in the take-home salary for the middle class. This, in turn, would boost consumption.
However, as per reports there might be a change in the income tax slabs but it might not exactly be in favour of the middle class. Instead of fragmented tax rates the finance ministry might impose a flat 10 per cent tax to individuals earning between Rs 2.5 lakh and Rs 10 lakh. Currently the rates are 5 per cent for taxpayers earning Rs 2.5 lakh and Rs 5 lakh and 20 per cent for individuals earning between Rs 5 lakh and Rs 10 lakh. Individuals earning less than Rs 2.5 lakh are exempted from paying tax.
FULL COVERAGE:Union Budget 2020
The GDP growth slipped to 4.5 per cent in the September quarter sending the entire country in a tizzy. The September quarter saw the slowest growth rate in over six years on account of weak manufacturing and dip in exports. The International Monetary Fund slashed the growth rate of India for 2019 to 4.8 per cent from the 6.1 per cent it had projected in October. IMF Chief Economist Gita Gopinath also said that India's slowdown is primarily responsible for the global decline in growth projections.
"We have projected global growth at 2.9 per cent for 2019 and 3.3 per cent for 2020 which is 0.1 percentage point lower than the October estimates. The vast majority of it comes from our downgrade for India which was quite significant for both years," said Gopinath.
Amid a slowing economy, the ministry might alter the take-home salary for the middle class who are heavily bogged down by income tax rates. However, it still remains to be seen how the Finance Minister steers the Budget 2020 amid such expectations.
The Budget session of Parliament will be held in two phases - from January 31 to February 11 and from March 2 to April 3. There will be a 19-day recess between both the phases.