At 13:27 IST, the S&P BSE Sensex, slumped 449.63 points or 1.1% at 40,273.86. The Nifty 50 index tumbled 118.7 points or 0.99% at 11,843.40.
The broader market was trading with mixed sentiment. The S&P BSE Mid-Cap index was down 0.88% while the S&P BSE Small-Cap index was down 0.78%.
The market breadth was titled in the favour of bears. On the BSE, 756 shares rose and 1346 shares fell. A total of 122 shares were unchanged. In Nifty 50 index, 9 stocks advanced while 41 stocks declined.
Union Budget 2020:
FM Nirmala Sitharaman proposed to bring a personal income tax regime, where income tax rates will be reduced. Person earning between Rs 5-7.5 lakhs will be required to pay tax at 10% against current 20%. Income between Rs 7.5 lakh to 10 lakh will pay taxes of 15%. Income between Rs 10 lakh to 12.5 lakh will pay taxes of 20%. Tax rate of 30% on income above Rs 15 lakh will be continued.
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FM proposed to abolish Dividend Distribution Tax (DDT). Companies will not be required to pay DDT. Dividend to be taxed only at the hands of recipients, at applicable rates. Concessional corporate tax cut to be extended to new domestic companies engaged in power generation
To boost startups, tax burden on employees due to tax on Employee Stock Options to be deferred by five years or till they leave the company or when they sell, whichever is earliest. FM makes housing more affordable, gives tax holiday to affordable housing developers.
Option to be provided to cooperative societies to be taxed at 22% plus 10% surcharge and 4% cess, with no exemptions or deductions. To be exempted also from Minimum Alternative Tax.
FM Nirmala Sitharaman said that government proposes to sell a part of its holding in Life Insurance Corporation of India (LIC) by initial public offer.
In a big announcement, FM Sitharaman informed Parliament during Budget presentation that India's fiscal deficit is now pegged at 3.8% for FY20 and 3.5% in 2021. Nominal GDP growth for FY21 revised to 10%.
FM said that mechanism will be made to address liquidity constraints of NBFCs and Housing finance corporations. Government will offer support by guaranteeing securities floated to provide liquidity for NBFCs.
Sitharaman said that national security is the government's top priority. Wealth creators will be respected in the country, she indicated. FM reassured taxpayers about commitment to eliminate tax harassment. "We wish to enshrine in the statutes a taxpayer charter through this Budget. Our govt remains committed to taking measures to ensure that our taxpayers are free from tax harassment of any kind," FM said.
FM asssured that robust mechanism is in place to monitor health of all schedule commercial banks and depositors money is absolutely safe. Deposit Insurance and Credit Guarantee Corporation has been permitted to increase deposit insurance coverage to Rs 5 lakh per depositor from Rs 1 lakh.
FM proposed Rs 27,300 crore for the development and promotion of industry and commerce in 2020-21.
FM Nirmala Sitharaman said that the government is committed to the goal of doubling farmers income by 2022. Government will incentivize farmers to go solar. Pradhan Mantri Kisan Urja Suraksha Utthan Mahabhiyan (PM KUSUM) will be expanded to provide 20 lakh farmers in setting up standalone solar pumps. Large solar power capacity to be set up alongside rail tracks, on land owned by Railways. FM announced Rs 20,000 crore for the renewable energy sector.
FM said that the fundamentals of the economy are strong. Central government's debt has come down to 48.7% in March 2019 from 52.2% in March 2014.
16 lakh new taxpayers were added to the system. An average household now saves about 4% of its monthly spend on account of reduced GST, revealed Sitharaman. GST has resulted in efficiency gains in the transport and logistics sector, inspector raj has vanished, it has benefitted Micro, Small & Medium Enterprises (MSME). Consumers have got an annual benefit of 1 lakh crore rupees by GST.
Several steps on formalisation of economy have been taken up. Between 2006-2016 India was able to raise 217 million people out of poverty, said Sitharaman.
Buzzing Index:
Shares of the other life insurers viz., ICICI Prudential Life Insurance Company (down 2.74%), SBI Life Insurance Company (down 0.82%) and HDFC Life Insurance Company (down 0.17%) declined on the government's plan to sell part of its stake in Life Insurance Corporation of India (LIC).
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