Union Budget 2020: Cong's Milind Deora welcomes FM's decision on income tax deduction, DDT

Presenting the Union Budget 2020 on February 1, Finance Minister Nirmala Sitharaman introduced a slew of measures to boost the Indian economy including various tax deduction schemes. She announced the launch of a new personal income tax regime and also scrapped dividend distribution tax (DDT) on companies. Hailing the move, Congress leader Milind Deora stated that a "higher disposable income would mean a higher consumer demand." 

Read: Budget 2020: Rajiv's 'Re 1 sent - 15p reaches' no more; schemes work under Modi, says FM

On the scrapping of DDT, the Congress leader stated that it was something that should have been done "long ago" since it was just a "double tax" that burdens the companies.

Read: Budget 2020: FM pays tribute to Arun Jaitley, upholds GST 'economically integrating India'

Reforms in the taxation regime

In the Union Budget 2020, the Finance Minister announced that around 70 of more than 100 income tax deductions and exemptions have been removed, in order to simplify tax system and lower tax rates. She also introduced an optional new taxation regime, sans rebates and concessions, but with lower tax rates. This may eventually become the norm given the government has said it will review the rebates to simplify the taxation regime. It was also announced that the Dividend Distribution Tax would be removed and dividends would only be taxed at hands of the recipient. 

She also proposed to remove the unpopular dividend distribution tax (DDT) which can give a major push to investment.

Read: Budget 2020: FM outlines Wellness, Water & Sanitation goals; empowers Jal Jeevan mission

New tax slab (without exemptions) 

No tax: 0-2.5

5% between 2.5-5 lakh

10% tax between 5-7.5 lakh

15% between 7.5-10 lakh

20% between 10 lakh-12.5 lakh

25% between 12.5-15 lakh

30% between above 15 lakh

Read: Budget 2020: FM boosts Medical education, details College-Hospital PPP linking initiative