News

Union Budget 2021

February 1, 2021
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The Hon’ble Finance Minister presented the Union Budget 2021 in the Parliament today on 01.02.2021.

A. General:

  1. PM Aatma Nirbhar Swasth Bharat Yojana to be launched with an outlay of Rs. 64,180 crore over 6 years.
  2. Debt financing for investment in InvITs and REITs to be enabled further
  3. Govt. to provide 2 lakhs crores to States and autonomous bodies for capital expenditure
  4. 7 Mega Investment Textile Parks to be launched in addition to the Production Linked Incentive Scheme in 3 years
  5. Govt. committed to investing Rs. 1.97 lakh crores to uplift manufacturing companies under ‘Production Linked Incentive’ scheme
  6. As per vehicle scrapping policy, vehicles to undergo fitness tests after 20 years in case of personal vehicles, 15 years in case of commercial vehicles
  7. Vehicle scrappage policy; details to be shared separately
  8. FM announces outlay of Rs 2.87 lakh crores for Jal Jeevan Mission
  9. Fund of more than Rs. 3 lakh crores allotted to power distribution sector
  10. Debt financing of INvits and Reits by FPIs will be enabled by making suitable amendments in relevant legislations
  11. Govt. to consolidate SEBI Act, 1992, Depositories Act, 1996 and SCRA into a single Securities Market Code
  12. FDI in the Insurance sector to be increased from 49% to 74% with foreign control but with safeguards
  13. SEBI will be notified as a regulator for a gold exchange
  14. Another ₹20,000 crore set aside to recapitalise government banks
  15. FM proposes the decriminalization of LLP Act, 2008
  16. E-court shall be implemented to strengthen the NCLT
  17. Asset Reconstruction Company and Asset Management Company to help banks tackle bad loans
  18. Definition of small companies to be raised by increasing the capital limit from Rs 50 lakh to Rs 2 crore and turnover from Rs 2 crore to Rs. 20 crores
  19. Govt. provides a big boost to the Startups by allowing Non-Residents to incorporate OPCs in India
  20. ‘Capital’ and ‘Turnover’ qualifying criteria for ‘One Person Company’ are proposed to be removed
  21. Surplus land with government ministries and public sector enterprises will be monetised via direct sale or concessions
  22. FM proposes to strategically divest two PSU banks and one General Insurance Co.; Divestment Target for F.Y. 22 set at Rs. 1.75 lakh crore
  23. Over Rs 75,000 crore paid to wheat farmers in 2020-21, 43.36 lakh benefited from the scheme
  24. BPCL, CONCOR, Pawan Hans, Air India divestments to be completed in FY 2021-22
  25. Schools will be set up with partnership with NGOs and Private Schools  Margin money requirement for loans will reduced for SC/STs to 15% from 25%
  26. Minimum wages to be applied to all categories; compliance burden on employer proposed to be reduced
  27. Period of stay to determine the ‘Residential Status’ of NRIs to be reduced from 182 days to 120 to attract foreign investment
  28. Govt. aims to bring the fiscal deficit below 5% of the GDP by 2025-26. The current fiscal deficit was at 9.5% of GDP

B. Direct Taxes:

  1. Senior citizen with the age of 75 years an above and have only pension income shall be exempted from filing of ITR.
  2. Reopening of assessment is restricted to 3 years from the 6 years.
  3. New dispute resolution shall be constituted for small tax payers having taxable income 50Lacs and tax dispute Rs. 10 Lacs.
  4. ITAT shall go faceless.
  5. Re-assessment can be done within 10 years if the income escaping assessment exceeds Rs. 50 lakhs and approval of Principal CIT is must
  6. Threshold limit for exemption from tax audit for digital transactions increased from Rs. 5 Crores to Rs. 10 Crores.
  7. Advance tax liability on Dividend shall arise only after the dividend is declare.
  8. Eligibility to claim Section 80EEA deduction extended by one year an additional amount of Rs. 1.5 Lacs
  9. Govt. to allow ‘Notified Infrastructure Debt Funds’ to issue tax efficient zero-coupon bonds to boost funding to infrastructure
  10. Exemption to start-up entities extended by one more year u/s 80IAC
  11. No deduction for any delay in deposit of employee’s contribution to the welfare schemes
  12. Threshold exemption limit under section 10(23C) for Charitable Institution raised from Rs. 1 Crore to Rs. 5 Crore

C. Indirect Tax

  1. Record collection in GST in the last few months due to various measures such as E-Invoicing, increase in capacity of GSTN
  2. More than 400 old exemptions under Customs would be reviewed
  3. Custom duty on gold and silver shall be rationalised
  4. Reducing duty on copper scrap halved to 2.5%. Duties on raw materials for the textile sector will also be cut.
  5. The duty on nylon and yarn cut to 5%
  6. Duty on steel scrap revoked until March 22
  7. Raising customs duty on solar inverters increased to 20% from 5% to boost the domestic production
  8. Customs duty rate on cotton increased from Nil to 10%