Budget 2020 | ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation

Budget 2020: Highlights and Details

Amit Mundhra — Mon, 03 Feb 2020 13:19:11 +0000

The Union Budget 2020 of India has been presented by Finance Minister Nirmala Sitharaman on the 1st of February, 2020. The government has targeted to reach $5 trillion economy by the end of 2022 and for that matter has taken some serious measures.

We will be sharing the Budget 2020 highlights and detailed sector-wise analysis –

Let’s dig into the details of the sector-wise measures announced by the government:

Budget 2020 has considered three prominent themes –

(i)’Aspirational India’ focusing to boost the standard of living

(ii)’Economic Development’ for all

(iii) ‘Caring India’ focusing on the building of a humane and compassionate society.

The other aspect of the Budget is that the FM has encouraged the state governments to undertake the implementation of below-mentioned model laws issued by the government of India.

Let’s now focus on the themes of this budget.

Aspirational India

Encouraging farmers to set up solar power generation units, solar pumps on their fallow or barren lands.
Proposing a plan to help farmers use proper manure and an irrigation system which uses little water.
NABARD would engage in mapping and geo-tagging all the warehouses of India. Additionally, Food Corporation of India and Warehousing Corporation of India would build warehousing facility on their land.
A proposal has been put forward to help farmers to use all kinds of fertilizers in a balanced way.
FM has proposed village storage scheme.
FM proposes to build up the seamless national cold supply chain for perishables, along with, seamless national cold storage chain; surging logistics companies.
Indian Railways would set up a ‘Kisan Rail’ through Public-Private Partnership.
FM proposes the framework for the development, management and conservation of marine fishery to raise fish production to 200 lakh tons and involving youth in fish farmer producer organisations.
Horticulture projected at the district level would be given more importance. The Online portal of Jaivik Kheti would be strengthened.
The government plans to double the milk processing capacity by 2025.
Integrated farming systems in rainfed areas would be expanded.
All Kisans to be covered under the Kisan Credit Card Scheme.
FM planned to expand Mission Indradhanush and add hospitals to Ayushman Bharat; What the doctor ordered
The FM proposed around Rs 3.6 lakh crore for piped water supply to households, recharging existing sources and rainwater harvesting during the current year.
The government announced an outlay of Rs 99,300 crore for the education sector and Rs 3,000 crore for skill development in the year 2020-21.
The FM has announced to work to eliminate foot and mouth diseases.
Viability gap funding through PPP model funding for 112 districts where there are no empanelled hospitals under Ayushman Bharat and proceeds from taxes, direct and indirect, on medical devices planned to be used for funding the schemes.
Swaccha Bharath Mission got allocated Rs12,300 crore in the budget.
FM allocated Rs 69,000 crore including the funds for PM Jan Aarogya Yojana.
To sustain ODF behaviour and to ensure no one is left behind, the government proposes the ODF+ scheme.
Project Preparation Facility for the working-age population, to be set up to prepare for infrastructure projects, actively involving young engineers and management graduates.
New education policy to be announced with the possibility that FDI funds would be obtained for education.
Government proposes to set up investment clearance cell for entrepreneurs, approximately 150 higher education institutions to provide apprenticeship embedded degree courses and to start degree level full-fledged programmes.

Economic Development

Development of smart cities and the promotion of manufacturing units to generate investment and employment opportunities.
Focusing on the manufacturing of network products and encouraging the electronics manufacturing industry.
All ministries are ordered to issue quality standards and the government would focus on the adoption of technical standard.
A brand new scheme Nirwik, exclusively for exporters has been proposed which will digitally refund duties and taxes imposed locally and the scheme would be launched from the Fiscal Year 2020-21.
Development of various districts as export hubs and promotion of government e-marketplaces (GEM).
National logistics policy to be released with a single-window e-logistics market.
Before 2024, 12 lots of highway bundles of over 6,000km would be monetized.
Large solar power capacity on the land owned by railways would be set up.
FM proposed to bring in more TEJAS like trains as well as Bengaluru suburban train.
Increasing the number of airports to 100 by the year 2022.
Power discoms sector – The government plans to introduce prepaid smart meters within the next 3 years in all states and UTs with the freedom to choose the supplier of electricity and the rate as per requirement.
Rs. 22000 crore proposed to power and renewable energy sector by the government.
FM proposes to expand the national gas grid from 16,200 km to reach 27,000 km to grow the gas markets in India.
Digital India Announcements: Government proposes to adopt technology to directly transfer the finances with the beneficiaries. Various policies to be launched soon enabling the private sector to build data centre parks. FTTH connections will link 100,000-gram panchayats within a year. In the year 2020-21, Rs 6,000 crore has been allocated for Bharat Net Program. Knowledge translation clusters would be set up across different sectors. Quantum Technologies will be opening up new frontiers with 8000 crores of outlay in the next 5 years with the vision to provide public institutions bed with digital connectivity.

Budget Shots – Genetic mapping of India to be done via two new medical schemes.

Caring Society

More than 600,000 Anganwadi workers would be equipped with a smartphone to upload the nutritional status of the students of India.
Government proposes Rs 35,600 crore for nutrition-related programmes in the year 2020-21.
Government has identified suitable technology to eliminate manual cleaning of sewer systems and septic tanks.
The government has allocated Rs. 85,000 crores for the welfare of Scheduled Castes and Other Backward Classes and 53,700 crore rupees for Scheduled Tribes.
Senior citizens: Government allocated Rs. 9,500 crore rupees for Senior citizens and Divyangs.
Culture: Government proposed to develop 5 archaeological sites as iconic sites with the on-site museum. A Tribal Museum to be set up in Ranchi, Jharkhand. A New currency museum to be embedded in the Kolkata Mint – The oldest mint in India. Ministry of culture got allocated Rs 3,150 crore in 2020-21.
Environment and climate change: India will comply with the promises made at Paris accord from January 1st, 2021.

Budget Shots – The two hands that will hold above-mentioned themes are (a) government that is clean (b) trusting each and every citizen.

Stay tuned for more budget updates!

The post Budget 2020: Highlights and Details first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

Tips to Read The Budget

Amit Mundhra — Sat, 01 Feb 2020 11:59:07 +0000

Finance Minister is all set to present her second budget and we are all set to make you understand the intricacies of it. Like always, we are here to enhance your knowledge with our easy-peasy article you will be a budget expert in no time.

With the budget fervour on, we are here to tell you about what does a budget includes, who prepares it and how is the budget approved. Moreover, we will also be sharing the tips through which you can easily understand the budget and flaunt your knowledge of it to others. Sounds like a win-win situation, let’s get started then!

Have you ever wondered who is the creator of the budget? If yes, then we have your answer. The Budget is prepared by the Finance Ministry and the final approval comes from the Prime Minister of India. Later, the Finance Minister of India presents the budget to the whole nation through a speech.

Finance Minister’s Budget speech is the wealth of information. It is full of knowledge and it can help you in getting an overview of the state of the economy. Now you must be thinking, what does a Budget Speech include? Well, the budget speech comprises of two parts – Part I and Part II. Part I deals with the general economic survey of the country and allocations of funds to various sectors, whereas, Part II deals with the Finance Bill containing various taxation proposals such as any income tax revisions.

Budget Tip: The text of the speech is released as soon as the Finance Minister presents it in the Lok Sabha.

As we are now aware that the final approval comes from the Prime Minister but do you know how is the Budget approved in the first place. Once the budget is presented before the Lok Sabha through a speech, it is presented in Rajya Sabha afterwards. Both Houses of Parliament then allocate time for a general discussion on the budget.

After the General Discussion on the Budget, the Houses are adjourned for a certain period. This is the period during which the demands for grants of various Ministeries and Departments are taken into consideration by the Standing Committee. A Standing Committee comprises of 45 members in total, including 30 from Lok Sabha and 15 from Rajya Sabha.

After this, the Houses move ahead towards the discussion and voting on demands for grants. The Speaker in consultation with the Leader of the house allots the time for voting.

On the last day, the process of ‘guillotine‘ is performed meaning all the outstanding Demands are put to the Vote of the House by the Speaker. Only the Lok Sabha holds the right to vote on the outstanding Demands.

Budget Tip: Quick reading of the budget can be done through ‘Budget at a Glance’ and ‘Key Features’ document, or via ‘Annual Financial Statement’ which have the detailed record of government finances.

That’s the process of the Budget. Hope this article was useful and you got to learn and know a lot. Stay tuned for more such articles.

The post Tips to Read The Budget first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

Union Budget 2020 Expectations: GST

Amit Mundhra — Mon, 27 Jan 2020 06:15:54 +0000

Everyone is busy with financial planning for the year 2020 and the Finance Ministry is busy with the planning of the upcoming Budget 2020. The union budget for the fiscal year 2020-21 is scheduled on 1st February 2020 and Sitharaman is all set to present her second budget as a Finance Minister. There are many things on the plate of the finance minister such as low industrial output, slowing demand and the overall GDP growth fixed at 5% which is at an 11-year low.

Since the last budget presented on 5th July 2019, the finance minister has announced a lot of incentives for the economy. These incentives include a cut down in tax rates for corporates and new manufacturing companies, new reforms in Goods and Service Tax law, capital infusion for PSU banks and setting up a separate fund for real estate and infrastructure. However, all these are going in vain as the economic indicators haven’t shown any signs of growth revival. Moreover, the government’s tax collections have been low too for a long time.

The call of the hour for the benefits of economists and industrialists as well as the general public is to revive the demand in the economy. This demand revival is more likely to steer the economy back into progress.

So, here are some expectations from the Budget 2020 concerning GST and taxation. Let’s get started –

1. A boost in the cash flows of the middle-class taxpayers

The finance ministry is considering to relax the personal income tax rates in the upcoming budget for the fiscal year 2020-21. The present rates comprise of 5% for income slab from Rs 2.5 to 5 lakh, 20% for income slab from Rs 5 to 10 lakh and 30% for income slab from Rs 10 lakh and above. Hence, one can easily detect the significant tax outgo for the particular section falling in the category of earning income between Rs 5 to 10 lakh. A decrease in the tax rate from 20% to 10% would definitely increase the disposable surplus in the hands of the middle class who are the growth drivers for the economy.

2. New GST Returns

New GST Returns in form RET-1 or RET-2 or RET-3 along with annexures in ANX-1 and ANX-2 might tweak the GST laws to enable new GST Return filing system, w.e.t., April 1st, 2020. To accommodate all these altercations, the Union Finance Minister may tweak the GST laws.

3. Savings-booster for individuals

Most of the tax savings of individuals are accounted to Section 80C. These savings include investment in LIC, government securities, mutual fund ELSS along with payments for housing loan repayment and children’s tuition fee with a condition that all these must be under the overall limit of Rs 1.5 lakh. This limit of Rs 1.5 lakh under section 80C was last upgraded in the Budget 2014.

For an individual, education costs and housing loan repayments form an important part of the financial commitments. Hence, leaving a very little room for savings. This budget could experience an enhancement of the limit under section 80C by the government to provide with a much-needed boost for public savings.

4. Incentives as per the Sector

To have a better outlook for the upcoming budget 2020, the Union Ministry of Finance has been holding meetings with the representatives of various sectors and industries. Sectors like real estate, non-banking financial companies (NBFCs), infrastructure and power Discoms have been suffering from the lack of demand and finances. The government has outlined a plan for real estate and infrastructure but the actions are yet to be carried out. Furthermore, there are assumptions that the infrastructure plan could be aided through the issuance of long term tax-deductible infrastructure bonds by the government.

5. Lower tax-rate for Partnerships and LLPs

Some MSMEs are paying tax at 30%, excluding surcharge and education cess, which consist of partnership firms and Limited Liability Partnerships (LLPs). While the government has handed out a tax cut on corporates and manufacturing companies, the other forms of business enterprises are still paying high taxes at 30%. In this budget, the government could have a tax rate cut down for these business enterprises to balance out a fair play among MSMEs.

Moreover, the government could also aid capital intensive MSMEs for their investments in plant and machinery. The investments could be boosted through a deduction under section 32AC. Section 32AC was introduced in the union budget of 2013 to encourage investments in new plant and machinery by various companies. Hence, the companies were allowed the deduction in addition to depreciation allowance. The minimum investment threshold was set at Rs 25 crore. The Finance Minister could also revamp this section to grant deduction benefits to MSMEs which have a lower investment threshold with a time horizon of 1-2 years.

6. Goods and Services Tax rate cut down

GST rate cuts for over the last two years are the reason behind the dwindling revenue collections. Many economists have been favouring a phased increase in the GST rates. But, the automobiles sector is all set for and is looking forward to a rate cut 28 % to 18 %. Furthermore, there is a chance of exemption from customs duty of 5 % for lithium-ion batteries. With all this, the health care segment in the upcoming budget also expects to have ‘health care services zero-rated product’ under GST. There are speculations that this budget, various items which fall in between 18% and 28 % may be scrutinised for a single rate.

As we all are aware that the government, itself, is running on a tight fiscal situation due to the lesser than expected tax collections and disinvestment collections. So, if there is a possible increase in the disposable surplus in the hands of individuals that can help in reviving consumer demand. Apart from this, the government is also taking into consideration to mobilising public savings via section 80C along with the issue of corporate bonds by way of top-rated PSUs.

So, these were some speculations from our side. if you have some more, do let us know!

Stay tuned for more blogs on GST.

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