Budget 2021-22: Key highlights

Today as the clock struck 11, Finance minister Nirmala Sitharaman presented the Union Budget for 2021-22. The unique thing about this year’s Budget was that it was presented digitally. Instead of the routine briefcase, a ‘made in India’ tablet was enveloped with the signatory red cloth. The focus of the Union Budget was mainly on 6 pillars namely- Health and wellbeing, physical and financial capital and infrastructure, inclusive development for an ambitious and aspirational India, reinstating the value of human capital, pioneering innovation, and research and development, and minimizing government and maximizing Governance.

"As always, this budget is aimed at helping corporates directly and indirectly," Congress leader Ramesh Chennithala in a statementhttps://t.co/bfT0L6aIit

— The Indian Express (@IndianExpress) February 1, 2021

The key highlights of the Union Budget can be summed up under the following heads-

• Direct Taxes

1. No change has been proposed under the current slab rates and the Income-tax. This came as a huge relief as the changes were anticipated by the experts;
2. Exemptions have been granted to senior citizens (75 years and above) who are dependent on pension as their sole source of income from filing their income tax returns. If taxable, it will be the duty of the Bank to deduct the same from their pension;
3. The time limit for the reopening of income tax assessment has been reduced. Previously, it was 6 years but now it has been reduced to 3 years. The rider on this provision is that if there is a serious allegation of tax evasion amounting to Rs 50 lacs or more then the Income-tax assessment can be re-opened till 10 years;
4. ITAT, that is, Income-tax Appellate Tribunal will do digital keeping the current situation in mind;
5. Capital gains from listed securities, dividends, etc will now play a role in pre-filing of returns along with Salary, TDS, and Tax payments;
6. The tax audit limit for people who carry out 95% of their transactions digitally has been increased to 10 crores;
7. Additional deduction of Rs. 1.5 lacs can be claimed for house loans taken up till 31^st 2022;
8. Dividend payment to REIT/Invit has been exempted from Tax deduction at source
9. Start-ups can now claim tax holiday for one more year, id eligible,
10. A Dispute Resolution Committee will be constituted for small taxpayers for easy and rapid dispute resolution;
11. ‘Advance tax liability’ on any income from dividend shall rise only after it is declared that the dividend is paid;
12. Now the employers cannot claim tax benefits on PF amount if they don’t deposit it;
13. FPIs have been given benefits on tax deductions on income derived from dividends at a lower treaty rate;
14. Small charitable trusts running schools and hospitals have also been benefitted as the exemption limit of annual receipt has been revised from Rs 1 crore to Rs 5 crore.

• Indirect taxes

1. There will be a use of deep analysis and Artificial intelligence to identify tax evaders of GST;
2. There has been a slew of hikes in Customs Duty for promoting Make in India;
3. Custom duty on Gold and Silver will be rationalized;

• Other highlights

1. There is a proposal to disinvest two more PSUs and a general insurance company;
2. A new mission named PM Atma Nirbhar Swasthya Bharat Yojna is to be launched to facilitate the development of primary, secondary, and tertiary healthcare;
3. Jal Jeevan Mission Urban is aimed to improve the nationwide water supply;
4. A central university will come up in Ladakh along with 100 new Sainik Schools and 750 new Eklavya Schools in Tribal areas;
5. New Infrastructure Projects is gifted to poll-bound states;
6. FDI in insurance sector companies will be increased from 74% to 49%.

It can be concluded that the ruling government has continued with its forte of bringing Bold budgets but this time it will depend upon execution. The budget has managed to tick all boxes from Capital generation, FDI. asset management, asset creation, healthcare, etc but only time will tell that whether it will take us towards V-shaped recovery or is it still a box of hollow promises.