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."
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.
Reducing individual income-tax for various tax slabs is a welcome step. Higher disposable income = higher consumer demand.— Milind Deora मिलिंद देवरा (@milinddeora) February 1, 2020
I also welcome the decision to scrap Dividend Distribution Tax. It was a double tax & should have been abolished a long time ago#Budget2020
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.
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