Budget Highlight 2021 – The total capital expenditure for the FY 2021-22 is Rs.5.54 lakh crore. In view of the need-of-hour change in the healthcare industry, FM suggested a different centrally funded system, PM Aatmanirbhar Swasth Bharat Yojana, with a cost of Rs.64,180 crore for 6 years.
In addition, the budget expenditure for health and welfare is expected to be Rs.2,23,846 crore for the fiscal year 2021-22, an increase of 137% on the Y-o-Y basis. The increased budget is anticipated to extend and improve established national health institutions, the National Center for Disease Control (NCDC), the Health Emergency Operations Centers and mobile hospitals.
Direct Tax Proposals – Budget highlights 2021
Certain direct tax proposals have been adopted, to some degree offering relief for individual taxpayers and start-ups. The individual and corporate tax rates for the fiscal year 2021-22 (AY 2022-23) remained unchanged. In a big change, the tax audit cap u/s 44AB has been raised from Rs 5 crore to Rs 10 crore (where only 95% of payments are digitized), giving relaxation to several corporate houses. Other planned changes are as follows.
IT relief for elderly folk over 75 years
It has been recommended to exclude elderly people from paying income tax returns where pension and interest income are their only source of revenue. Section 194P was recently implemented to require banks to withhold tax on older people aged 75 yrs old who seem to have a pension and interest income.
Must Read – Senior Citizen Saving Scheme
Time reduction for IT Proceedings
Other than in cases of significant tax dodging, the assessment process for the majority of the cases will be reopened only for a term of up to three years, subject to an earlier period of 6 years.
Constitution of the Dispute Resolution Committee
U/s 245MA, those evaluated with such a taxable income of up to Rs.50 lakh (for small and medium taxpayers) as well as any contested income of Rs.10 lakh may meet this panel. It would deter new conflicts and address the matter at an early point.
National Faceless Income Tax Appellate Tribunal Center
Provision is rendered in a far less jurisdictional way for faceless litigation well before Income Tax Appellate Tribunal (ITAT). Which would decrease taxpayer compliance expenses and improve clarity in the disposal of appeals. In addition, it would also help to achieve fair job distribution in separate benches and to ensure effective administration.
Must Read – What is Faceless Tax?
Tax benefits for start-ups
The start-up tax holiday has indeed been expanded by yet another year until 31 March 2022.
Must Read – Tax Incentives for start-ups
There is indeed a proposal to notify rules for eliminating the burden of double taxation.
Must Read – How to calculate taxable income for NRI
Pre-filing the returns to be in the forefront
Pay, tax payments, TDS, etc. would be authorized for pre-filling. In addition, information of capital gains from listed securities, dividend revenue, etc. will be pre-filled.
Advance income tax on dividends
The advance tax would henceforth refer on dividend income only after it has already been declared. Tax holidays was proposed for aircraft leasing and leasing firms.
Disallowance of PF contribution
In the event that the employee’s PF contribution has been withheld but not claimed by the employer, the employer would not be permitted to deduct it.
Section 43CA has been revised
The stamp duty value could be equivalent to 120% (earlier 110%) of the consideration if the relocation of a “residential unit,” i.e. an individual housing unit, is rendered around 12 November 2020 and 30 June 2021.
Amendment of Section 44ADA
Section 44ADA extended to all assesses who were citizens of India. It now refers only to a resident individual, a Hindu Undivided Family (HUF) or a partnership company apart from LLP.
Extended deduction of section 80EEA
The extra deduction for subsidized housing was lengthened before 31 March 2022. The tax exemption for sustainable rental ventures has indeed been authorized.
Indirect Tax Proposals – Budget highlights 2021
Some of the things upon which customs duty rate is updated are as follows.
- Lowered duty on copper scrap from 5% to 2.5%.
- Basic and special additional excise duties on petrol and high-speed diesel oil are reduced.
- Increased duty on solar inverters from 5% to 20%.
- Increased duty on solar lanterns from 5% to 15%.
- The basic customs duties on gold and silver have been reduced.
- The Department will streamline the customs duties on textiles, chemicals and other goods.
- The new prices would start from 2 February 2021 onwards.
New tariff products under 2404 11 00 and 2404 19 00 were already added in accordance with the forthcoming HS 2022 nomenclature. In addition, with starting from 1 January 2022, NCCD is set at 25% on such tariff products.
Agriculture Infrastructure and Development Cess (AIDC) was freshly placed on petrol and diesel at Rs2.5 and Rs.4 per litre, respectively.
As far as agricultural goods are concerned, customs duties on cotton, silks, alcohol, etc. are raised.
Exemption from Social Welfare Surcharge on the amount of AIDC levied on gold and silver. Consequently, these products will incur a surcharge at the regular rate, just on value plus basic customs tax.
The exemption for the import of leather would be removed when it is locally made.
A new program dubbed ‘Turant Customs’ would be launched for faceless, paperless and non-contact customs initiatives.
For various provisions, the CGST act was implemented as follows:
- Section 16 modified to ensure taxpayers to assert an input tax credit focused on GSTR-2A and GSTR-2B.
- Section 50 of the CGST Act is revised to allow for retroactive payment of interest on net cash liability with force on July 1 2017.
- Section 35 and 44 amended: the necessary obligation to request a GST reconciliation report certified by the required practitioner shall be eased by enabling the annual return to be self-certified. The Commissioner may exclude a class of taxpayers from the obligation to file an annual return.
For complete information – Financial Bill 2021