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Budget 2021-2022

Highlights from Budget 2021-2022

Last Updated 16th Jun 2021

The FM Nirmala Sitharaman presented the first paperless Union budget on 1st Feb 2021. Few leading announcements impacting the common Indian Citizens are:

  • Employers will not get deduction for employee contribution if they don’t deposit the PF contribution on time.
  • A budget of ₹ 35,000 crores allotted for Covid-19 vaccines.
  • Senior citizens of 75 years+ with pension and interest income are now exempt from filing Income Tax Returns.
  • Tax holiday on affordable housing projects and start-ups extended for one year till 31st March 2022
  • A faceless National income tax appellate tribunal to be set up.
  • All About Union Budget 2021
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Budget Highlights 2021-2022

After the series of small budgets in the form of relief packages, the FM Sitharaman presented the first Union Budget of the third decade of the 21st century to provide relief to the common citizens who are going through a lot of financial stress due to the Covid-19 pandemic.Major announcements in different sectors are:

MSMEs and Individuals

  • In FY22, ₹15,700 crores will be allocated by the Government to the MSME sector.
  • The Government is also proposing to reduce the margin money demand in start-up India scheme from 25% to 15%.
  • Now NRIs can incorporate one person companies in India as well.

Taxation

The taxation related major announcements are:-

  • Senior citizens above 75 years with a pension and interest earnings are not required to file Income Tax Returns.
  • Senior citizens above 75 and with pension and interest earnings need not file returns.
  • For small taxpayers, a dispute resolution committee is going to be established. This will help individuals with taxable income up to ₹ 50 Lakh and disputer income up to ₹ 10 Lakh.
  • The central government proposed establishing faceless income tax appeal courts and a national income tax appellate tribunal centre.
  • Government has announced relief for Non-Resident Indians (NRIs) from double taxation on overseas retirement accounts, claiming exemption on tax deducted from that money in India. There is an unevenness in the taxability of these funds in India and the respective country.
  • The eligibility for claiming tax holiday and capital gains exemption for start-up investments has been extended until 31st March 2022.
  • The Govt will reduce GST’s inverted duty structures and review 400 old exemptions and start consultation from Oct 2021.
  • The government recommends that the Real Estate Investment Trust (REIT) or Infrastructure Investment Trust (InvIT) dividend payments be exempted from TDS.
  • The government has increased the tax audit limit to ₹ 10 Cr for companies making 95% of their transactions digitally.
  • Only cases of severe tax violations about concealment of income more than ₹ 50 Lakh in a year will be allowed to be reopened till ten years. For rest, the cases can be reopened only up to 3 years.

Savings

If the employers don’t deposit PF contribution on time, they will lose the deduction for their contribution. The interest earned on PF's annual contribution above the ₹ 2.50 Lakh per annum amount is now taxable, impacting voluntary provident fund contributions.

Housing, and Healthcare

  • The tax holiday of ₹ 1.50 Lakh interest is now available for migrant workers under the affordable rental housing scheme.
  • Tax holiday on affordable housing projects extended for 1 year till March 31, 2022.
  • Union Budget introduces a ₹ 64,180 cr scheme to upgrade healthcare infrastructure under Prime minister Atmanirbhar Swasthya Bharat Yojana.
  • Earlier tax holidays of affordable housing projects have also been extended to 31st March, 2022.

Banking, Market and Insurance

  • The SEBI Act, Depositories Act, and the two other laws are to be made into a singular Unified Securities Market Code.
  • An investor charter introduced for all financial products.
  • The government has raised The Foreign Direct Investment (FDI) limit in the insurance sector from 49% to 74%.
  • An asset reconstruction firm is going to be set up to take over stressed loans and value realisation.
  • The government will streamline the latest increase of deposit insurance so that depositors can easily access their savings and provide relief for depositors associated with banks under stress.
  • LIC’s initial public offering (IPO) will be completed in 2021-2022.
  • Government to set up a National Development Finance Institution capitalised with ₹ 20000 crores to lend ₹ 5 Lakh crores in 3 years. Through the infrastructure investment trust (InvIT) and real estate investment trust (REIT) routes, debt financing will be enabled by amending the rules accordingly.

Agriculture & allied sector and rural development

  • The government has introduced an agriculture cess of ₹ 2.5/litre on petrol and ₹ 4/litre diesel.
  • The FM has announced that there has been an increase of 1.5 times in MSP price.
  • More than 1,000 mandis are to be integrated into the E-NAM market place.

Industry and Infrastructure

  • A ₹ 5.54 trillion capital investment to boost the demand for heavy and medium commercial vehicles.
  • The government decides to introduce a voluntary scrappage policy scheme and augment the public transport system by adding more buses. The commercial vehicles 15+ years old and personal vehicles more than 20 years old will be scrapped. The government has allotted ₹ 18,000 crores to buy 20000 buses.
  • ₹ 1.10 Lakh crore has been allocated for Indian Railways in FY22 in Union Budget 2021. The government has revealed a future rail plan for Indian Railways by 2030.

Education

  • The government will set up 100 Sainik Schools, and 750 Eklavya schools will be set up in tribal areas.
  • Ladakh will soon have a new central university.
  • Under NEP 2020, more than 15,000 schools will be strengthened.
  • An 'umbrella' structure will be created for central higher education institutions in various cities such as Hyderabad.

Conclusion :With no change in the Income Tax slab for individuals taxpayers, the union budget 2021-2022 was presented to compensate for the issues that appeared due to the Covid-19 pandemic. The Budget 2021-2022 will boost health, insurance, banking, and other sectors. The budget caters to the immediate goals of citizens’ needs and adds up the vision of transforming the railways and other sectors.

FAQs

What is the date of budget 2021?

The budget 2021-2022 was presented by the Indian finance minister Nirmala Sitharaman on the 1st February 2021.

Is there any change announced in the income tax slab in the budget 2021?

No, there has been no changes announced in the income tax slabs.

Who presents India's budget?

India's finance minister presents the country's budget in the parliament's lower house (Loksabha).


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Our News - Jun 2021
  • 2021-04-12 : Faceless tax assessment solved more than 60% of IT cases
    CBDT reported that the faceless tax assessment solved more than 60% of IT cases. It was set up with an aim to impart greater efficiency, transparency and accountability by eliminating the interface between the Assessing Officer and the assesses in the course of proceedings to the extent technologically feasible.
  • 2021-04-01 : New ITR rule for senior citizens above 75 years from 1 April
    With effect from 1 April 2021, senior citizens above 75 years of age will be exempted from filing income tax returns. This facility will be available to only those senior citizens who have no other income other than pension and interest income.
  • 2021-03-02 : CBDT extends dates for penalties and assessments
    CBDT extended the due date for penalties under the Income Tax Act, 1961 to 30th June 2021. Further, it also extended the deadline for assessments under the Income Tax Act and notices under the Benami Property Transaction Act, 1988 to 30th April 2021.
  • 2021-02-02 : Income tax won’t be taxed twice for NRIs
    Union Budget 2021-2022 proposes to provide relief from double taxation for NRIs on money accrued in foreign retirement accounts by claiming relief on tax deducted on such money in India. Currently, there is a mismatch in the year of taxability of such funds in India and the respective foreign country.
  • 2021-02-01 : Dispute resolution committee and National faceless income tax appellate tribunal to be set up
    FM proposed the setting up of the National faceless income tax appellate tribunal for individual taxpayers. Details of capital gains and interest from banks, post offices, etc will be pre-filled to ease filing of IT returns. Further, a Dispute a resolution committee will be set up for small companies.
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