Key Highlight of Union Budget 2021

Key Highlight of Union Budget 2021

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Today, on February 1 Union Finance Minister Nirmala Sitharaman presented the Union Budget 2021. This budget will be India's first-ever paperless Union Budget, as a few days back Finance Minister Nirmala Sitharaman launched the Budget mobile application. 

Previously where there are a large number of Budget documents needs to be printed but this year there is no need for this as this time budget is totally paperless,  the COVID-19 protocol is the reason behind this. This time the budget will be distributed electronically to the Members of Parliament (MPs). The economy is still overcoming the effects caused by COVID-19. 

Image Source: Google Image

Here are some major give away from this budget speech by the Finance Minister:

• FDI in the insurance sector proposed to be hiked to 74% from 49%. 

• Infrastructure Debt Funds will now be  allowed to issue Zero Coupon Bonds.

• Strategic disinvestment of companies along with BPCL, Air India, Pawan Hans, IDBI Bank, Container Corporation of India to be completed in 2021-22

• Government is planning to bring an LIC IPO this year.

• Tax audit limit was Rs.5 crore in 2020. To further incentivise, the limit is increased to Rs.10 crore.

• MCA 21 version 3.0 will have additional module for e-scrutiny, e-adjudication

• Time limit to reopen the assessment procedures under the Income Tax Act is reduced from 6 years to 3 years

• Allowing NRIs to incorporate OPC in India, residency for a person setting up a One person company from 182 days to 128 days in India.

• Advance Tax liability on dividend income shall arise only after declaration or payment of dividend.

• Withdrawing exemption on import of leather as they are domestically produced

• Turant Customs initiative – faceless, paperless, and contactless customs measures’, and contactless customs measures.

• Seven ‘Textile Parks’ will  be developed in the next 3 year across the country.

• Definition of small companies is going to be revised by raising capital base to Rs 2 cr from current limit of Rs 50 lakh and increase the threshold of maximum turnover from Rs 2 crore to Rs 20 crore.

• Fitness tests will be necessary after 20 years for personal vehicles and after 15 years for commercial vehicles.

• Social security benefits to be extended to gig and platform workers. Minimum wages will apply to all categories of workers and will be covered under ESIC.

• For Startup and Innovators- OPC without limit for Turnover or Paid-up capital

• Relief for Senior Citizens: 75 years and above with only Pension and Interest – No need to file Return. TDS will be deducted.

• A dispute resolution committee shall be set up for small taxpayers with Income upto 50 lakhs and disputed income upto 10 lakhs.

• Deduction u/s 80IAC for start-ups shall be extended upto 31/3/22. Exemption for investment in start-up shall also be extended for one year.

• Late deposit of Employee Contribution to funds shall be disallowed for employers.

• All communication with ITAT shall be electronic providing for faceless appeal at ITAT

• Housing Loan interest deduction u/s 80EEA extended by one year for loans upto 31/3/22.

• Turnover limit for 10(23C) exemption for educational and medical trusts shall increase from 1 crore to 5 crores.

• Tax Exemption shall be provided for rental housing

•  NRIs will get relief from difficulties due to difference in fiscal year and claim of foreign tax credit.

• 80EEA to be extended to loans taken up to 31st March 2022

• Reassessment be opened for 10 years only if evidence of concealment of income of Rs 50 lakh or more in a year

• Deducted PFs but not deposited by the employer. A late deposit will not be allowed as a deduction for the employer

• Salary, Tax Payments, TDS already pre-filled. Capital Gains, Dividend incomes, interest income will now be pre-filled

•  80IAC extended upto 31st march 2021

•  Reduced duty on copper scrap from 5% to 2.5%

•  BCD rates to be reduced to 5% on Textiles

• Custom duty to be rationalised for gold and silver

• Rising duty on solar inverters from 5% to 20% and solar lanterns from 5% to 15%

Source: Microsoft News, DNA, Financial Express, Zee Business, Tex Guru, Money Control, Indian Express, Bussiness Today & others