Here’s a snapshot of the Budget highlights 2021:-
General
1. First digital Budget in the history of India
2. Vehicle Scrapping Policy. Vehicle Fitness Test after 20 years in case of Personal vehicle and 15 years in case of commercial vehicles
3. 64,180 crores allocated for New Health Schemes
4. 35,000 crores allocated for Covid Vaccine
5. 7 Mega Textile Investment parks will be launched in 3 years
6. 5.54 lakh crore provided for Capital Expenditure
7. 1.18 lakh crore for Ministry of Roads
8. 1.10 lakh crore allocated to Railways
9. Proposal to amend Insurance Act. Proposal to increase FDI from 49% to 74 %.
10. Deposit Insurance cover (DICGC Act 1961 to be amended). Easy and time bound access of deposits to help depositors of stress banks.
11. Proposal to revive definition of ‘Small Companies’ under Companies Act 2013. Capital less than 2 Cr. and Turnover Less than 20 Cr.
12. Disinvestment: IPO of LIC, Announced Disinvestment of Companies will be completed in FY 2021-22
Direct and Indirect tax
1. Senior Citizens: Reduced Compliance burden. 75 years and above. Proposal not to file ITR if only pension income and interest income.
2. Reduction in time for IT Proceedings: Reopening of Assessments period reduced from 6 years to 3 years except in cases of serious tax evasion cases
3. Proposal to constitute ‘Dispute Resolution Committee’. (Taxable income 50 lakhs and disputed income 10 lakh).
4. National Faceless Income Tax Appellate Tribunal Centre
5. Relaxations to NRI: Propose to notify rules for removing hardship for double taxation.
6. Tax Audit Limit: Proposal of tax audit increased from 5 Cr. to 10 cr. (Only for 95% digitized payments business)
7. Propose to provide relief on advance tax liability on dividend income.
8. Propose to include tax holidays for Aircraft leasing companies
9. Prefiling of returns (Salary, Tax payments, TDS etc.) Details of Capital gains from listed Securities, dividend income, etc. will be prefilled
10. Small Charitable Trusts. Increased from 1 crore to 5 crores (Compliance limit)
11. Late deposit of employee’s contribution by employer will not be allowed as deduction
12. Incentive to startup: Tax holiday exemption for one more year
13. Duties reduced on various textile, chemicals and other products
14. Gold and Silver (BCD reduced)
15. Agriculture Products: Custom duty increased on cottons, silks, alcohol etc.
Direct Taxes
No changes in the overall Income tax slab rates.
- No ITR filing for senior citizens (75 years and above) for those only who have interest and pension income.
- Time-line for reopening tax returns reduced to 3 years from 6 years.
- Advance Tax Liability to arise only after the payment divided.
- Tax Audit Threshold raised to INR 10 Crore for Digital Transactions.
- Housing For All – 1.5 lac interest deduction extended for 1 more year till Mar-22.
Indirect Taxes
No changes in corporate tax.
- Mobile components custom duty raised to 2.5%.
- Raising duties on solar inverters from 5% to 20%.
- Custom Duty on Cotton increased from Nil to 10%.
- Agriculture Infrastructure and Development Cess (AIDC) to be introduced in specific products. As of now Rs. 2.5 per litre has been imposed on petrol and Rs. 4 per litre on diesel.
Financial Services
- Insurance sector FDI limit proposed to be increased from 49% to 74%.
- ARC and AMC to consolidate the stressed assets and move to AIF structure. Positive for PSBs. INR 20,000 crore allocated for capitalization for PSBs.
- Incentivising Start-ups: One person company, no turnover and no paid up capital.
- Loan size eligible for debt recovery under SARFAESI Act 2002 is reduced from 50 lakhs to 20 lakhs.
- FY22 disinvestment target at INR 1.75 lakh crore vs INR 2.2 lakh crore (Budget estimate) in FY21.
The Agriculture & Rural Focus
- FY22 Agriculture Credit Target at INR 16.5 Lac Crore.
- Agriculture Infrastructure Fund increased to INR 40,000 Crore.
- Micro Irrigation corpus doubled to INR 10,000 Crore.
- To Develop 5 major Fishery hubs across India.
- E-NAMs to be extended to additional 1000 mandis across India.
Infrastructure & Transportation Sector
- Government aims to complete 11,000 km of National Highway Infrastructure this year.
- 3800 km of Highway constructed under Bharat Mala. Another 8500 km is expected to be constructed by March 2022.
- Total 11,000 km National Highway targeted under Bharat mala. INR 1,18,000 crore allotted to MORTH.
- Rs. 110,000 crore allotted to Railways for a National Rail Plan for India, aimed at making Railways future ready and reducing logistic costs.
- FY21 Budget Estimates are 4.12 Lakh crore for CAPEX.
Health
- PM Aatmanirbhar Health Yojana to spend INR 64100 crore over 6 years, in addition to National Health Mission.
- Health budget estimates are at Rs. 2.23 lakh crore in FY22 up from Budget expectation of Rs. 94 thousand crore in FY21.
- Rs. 35 thousand crore allocated for COVID-19 vaccines in FY22.
- Expansion of Integrated Health portal to all states and UTs.
- Urban Jal Jeevan Mission (for AMRUT cities) outlay: INR 2.87 lakh crores.
Power
- New Discom scheme worth 3 lakh crores, to be implemented over the next 5 years for upgrading the Infrastructure i.e. Prepaid meters, Feeder separation and System upgrades
- Framework to put in place to give consumers the right to select its own power provider.
- 6000 kms to be taken for Railway electrification in FY22 and 100% electrification of the tracks.
- Ujjwala scheme will be extended to additional 1 crore beneficiaries. The current beneficiaries are 8 crores.
Education
- To setup 758 Eklavya model schools in tribal areas.
- Allocation of INR 3000 crores for National apprenticeship program in FY22.