The budget 2021-22 was presented by Finance Minister of India, Mrs Nirmala Sitharaman, in the parliament on 1 Feb 2021. This is the first digital budget in the history of India.
The highlights of the budget are divided into General followed by direct & indirect taxes.
- Seven mega textile investment parks will be launched in 3 years.
- Vehicles scraping policy, fitness test after 20 years in case of personal vehicles (15 in case of commercial vehicles).
- 64,180 cr is expected to be allocated for new health schemes.
- 35,000 cr allocated for the covid vaccine.
- 5,54,000 cr allocated for capital expenditure.
- 1,18,000 cr proposed for ministry roads.
- 1,10,000 cr allocated to railways.
- Proposal to amend the Insurance Act.
- Proposal to increase foreign direct investment (FDI) from 49% to 75%.
- Deposit insurance cover (DICGC Act 1961 to be amended). Easy and time-bound access of deposits to help depositors of stress banks.
- Proposal to review the definition of Small companies under the Companies Act 2013 for capital less than 2cr and turnover less than 20 cr.
- IPO of LIC announced disinvestment of companies in the financial year 2021-22
Direct & Indirect Taxes:
- Pre-filing of returns (salary, tax payment, TDS). Details of capital gains from listed securities, dividend income etc will be prefilled.
- Relaxation to NRIs- Proposed to notify rules for removing hardship for double taxation.
- Senior citizens- reduced compliance burden for 75 years and above. Proposal not to file ITR if only pension income and interest income.
- Reduction in time for IT proceedings – Reopening of assessment period reduced from 6 to 3years except in case of senior case evasion.
- Proposal to constitute ‘Dispute resolution committee – taxable income 50,00,000 and disputable income 10,00,000
- National Faceless Income Tax appellate Tribunal Centre.
- Tax Audit limit – proposal of tax audit increased from 5 cr to 10cr (Only for 95% digitized payments)
- Proposal to provide relief on advanced tax liability on dividend income.
- Proposal to include Tax holidays for aircraft leasing companies.
- Late deposit of employees’ contribution by the employer will not be allowed as a deduction.
- An incentive to startups- tax holiday for one more year.
- Duties reduced on various textiles and other products.
- Agriculture- custom duty increase on silk, cotton and alcohol etc.
- Gold and Silver- import duty reduced from 12.5% to 7.5% ahead of wedding season.
- Budget allocation for education reduced by 6.5%.
Dr Sunita Panicker, Principal, MVM College of Arts, Science and Management
Mr. Jeevan Joswin Pais, Faculty Member