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Budget 2021 Highlights: Key Takeaways, Important Points

Know all the budget 2021 highlights, and gather as many insights as possible on the same.

The honorable finance minister Nirmala sitaraman on the 1st February 2021 in the parliament presented In 2021 to 2022 Union budget. The finance minister also gave the budget speech from 11 am to 1:00 pm. The current budget focuses on seven pillars that will help revive the economy. The seven pillars include:

  • Health and well-being.
  • Inclusive physical and financial capital development reinvigorating infrastructure human capital innovation and research and development.
  • Minimum government and maximum governance.

The budget also has come up with some regulations surrounding the securities market,
which would be proposed to be merged as one singular code.

Economic reforms and schemes present in the budget highlights for 2021

For the financial year 2021 to 2022, the overall expenditure regarding capital will be INR 5,54,000 lakh crore. The need of the hour is the healthcare sector’s improvement, so the finance minister has proposed a new centrally sponsored scheme, including the Pradhan Mantri Atma Nirbhar swatch Bharat yojana featuring the outlay of 64,180 crores over the next six years.

Furthermore, the budget has outlaid for health and well-being, estimated at around 2,23,846 crores for the financial year 2021 to 2022, which is a rise of 130% y to y basis. The increased allocation will likely expand and strengthen the existing national healthcare institutions’ health emergency operations, mobile hospitals, and the national center for Disease Control.

One of the essential highlights was the increase in the FDI limits in the insurance sector, which has increased from 49% to 74%. The government is also looking forward to divesting the two public sector units and one insurance company.

Direct Tax Proposals Featuring The Budget Highlights 2021

Some direct tax proposals were also introduced, relaxing the individual taxpayers and start-ups to some extent. The individual and corporate tax rates were unchanged for 2021 to 2022. The limit for taxation audits under section 44 AB has been enhanced from INR 5,00,00,000 to INR 10,00,00,000, which is a significant move. Only 195% of the payments are digitized, which provides considerable relief to several corporate houses. The proposed amendments are as follows.

IT Relaxation For Senior Citizens Above The Age of 75 First Stop

It has been proposed to exempt all senior citizens from filing Income tax returns if the pension and interest income are their only animal income sources. Section 194 P has been inserted newly to enforce the bank to deduct some tax on the senior citizens above the age of 75 and have only pension and interest income from the bank.

Reduction In Time For The Income Tax Proceedings

Assessment proceedings in the rest of the cases will be reopened only for three years except in the case of serious tax evasion. The time limit earlier was six years. Constitute dispute resolution committee

Those assisting with a taxable income of more than 50,00,000 for small and medium taxpayers and only disputed income of INR 10,00,000 can approach the committee provided under Section 245 ma and settle the issue at the best stage.

National Faceless Income Tax Appellate Tribunal Center

It will help reduce the taxpayer’s compliance cost and enhance transparency in the disposal of further appeals. This will also help in achieving some distribution of work on various benches. The main reason is that this will help in ensuring efficient administration.

Tax Initiatives For Start-ups

The start-up tax holiday is extended for one more year, that is, till 31st March 2022.

Relaxations

There is a proposal to notify all the rules and regulations for removing the challenges of double taxation.

Pre-Filing Of Returns Must Be Forefront

The pre-filing would be allowed for Tax payment, salary TDs, etc… Additionally, details of all the Capital gains From listed securities dividend income would be pre-filled.

Disallowance Of The PF Contribution

the PF contribution will not get allowed – deduction for the employer in the case where the Provident fund of the employee was deducted but not deposited by the concerned employer.

Section 43 CA.

The value of stamp duty would be 120% of the consideration if any residential unit transfers, meaning an independent housing unit is made anywhere between 12th November 2020 and 30th June 2021.

Amendment to Section 44ada

This section will be applied to assess who are residents in India. It applies to all the resident individual Hindu undivided families a partnership firm another LLP.

Section 80

The affordable housing additional direction is now extended till 31st March 2022.

Indirect Tax Proposals

The few items on which the custom duty rates are revised are given here:

  • On copper scrap, the duty is reduced from 5% to just 2.5%.
  • Primary and special additional excise duty on petrol and high-speed diesel oil is reduced.
  • Solar inverter’s duties increased from 5% to 20%.
  • Duty on solar Lanterns is increased from 5% to 15%.
  • The essential customs duty on silver and gold is reduced.
  • The department will now rationalize the duty on textile chemicals instead of other products.
  • The revised rates would be applicable from 2nd February 2021.
  • The customs duty is increased regarding agricultural products, including cotton, silk, and alcohol.

Conclusion:

Social welfare surcharge on the value imposed on gold and silver is exempted from social welfare surcharge. Hence the items would attract some charge on the importance of an additional essential customs duty.

Hence this is all you need to know about the budget highlights. If you want to know more about the budget: https://www.indiabudget.gov.in/ for 2021, then the experts at Vakilsearch could be of perfect help here.

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