Hon'ble Finance Minister Nirmala Sitharaman conferred The Union Budget of India 2021- 2022 on first February 2021. Moreover, the Union Budget 2021 lays emphasis on the seven pillars for invigorating the economy- Health and success, Physical and Monetary capital and infrastructure, Inclusive Development for Aspirational India, Reinvigorating Human resources, Innovate and Research & Development, and Minimum Government with Maximum Governance. Furthermore, vital announcements enclosed a slew of hikes in custom duty to benefit MAKE IN INDIA, varied infrastructure pledges to poll-bound stats, and a proposal to disinvest two additional PSBs and general insurance organization. We also discuss the impact on income tax in the union budget 2021. Let's begin!
In This Article
- Highlights of the Union Budget 2021
- i)Health and Sanitation
- iv)Economy and Finance
- Union Budget of India Tax Highlights
- How Retail Investors and Taxpayers Will be Affected?
Highlights of the Union Budget 2021
Health and Sanitation:
1. A new scheme, titled PM Atma Nirbhar Swasthya Bharat Yojna, will be launched to establish primary, secondary and tertiary healthcare.
2. Also, Mission POSHAN 2.0 will improve nutritional outcomes across 112 aspirational districts.
3. Operationalization of seventeen new public health units at points of entry Modernizing of existing health units at thirty-two airports, fifteen seaports, and land ports.
4. Jal Jeevan Mission Urban subsequently geared toward better water supply throughout the nation Strengthening of Urban SWACHH BHARAT MISSION.
1. The government can establish one hundred new Sainik colleges.
2. The government plans to establish 750 Eklavya colleges in tribal areas. A Central University would be in Ladakh.
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1. Firstly, Vehicle Scrapping Policy will be close out old and unfit vehicles – all vehicles to endure a fitness test in automatic fitness centers every twenty years (personal vehicles), every fifteen years (commercial vehicles) Highways and Road Works proclaimed in Kerala, Tamil Nadu, West Bengal, and Assam.
2. Secondly, National Assets Monetizing Pipeline launched to manage the asset monetization process. National Rail Plan created to determine a future-ready Railway system by 2030. Consequently, by 2023, 100% electrification of Railways would be complete.
3. Thirdly, Metro services proclaimed in twenty-seven cities, and further allocations for Kochi Metro, Chennai Metro Phase 2, Bengaluru Metro Phase 2A and B, Nashik and Nagpur Metros.
4. Finally, the government will also launch National Hydrogen Mission to get hydrogen from green power sources. Moreover, the recycling capacity of ports is proposed to be consequently increased by 2024. Also, the gas pipeline project is planned to establish in Jammu and Kashmir. Furthermore, the Pradhan Mantri Ujjwala Yojana (LPG scheme) to be extended to cover one crore more beneficiaries.
Economy and Finance:
1. The fiscal deficit subsequently stands at 9.5% of the GDP, estimated to be 6.8% in 2021-2022. Moreover, a proposal to allow States to raise borrowings up to 4% of GSDP this year.
2. The Government will also set up an asset reconstruction company to take over stressed loans. Furthermore, the deposit insurance consequently raised from Rs 1 lakh to Rs 5 lakh for bank depositors. Furthermore, the Union budget Proposed to decriminalize the Limited Liability Partnership Act of 2008.
1. Firstly, Agriculture infrastructure fund to be made available for APMCs to spice up infrastructure. The govt. will integrate one thousand additional Mandis into the E-NAM market place.
2. Finally, the development of 5 major fishing hubs. It would also include Chennai, Kochi, and Paradip. The government will subsequently establish a multipurpose seaweed park in Tamil Nadu.
1. The government will be also be launching a portal to regulate and manage information on gig employees and construction workers. Moreover, the social facilities would be provided to gig and platform workers.
2. Subsequently, margin capital needed for loans via the Stand-up India scheme is attenuated from 25% to 15% for SCs, STs, and women.
Union Budget of India Tax Highlights
Union Budget 2021 introduced certain bound tax proposals, consequently providing relaxation to individual taxpayers and startups to some extent. Moreover, the individual and company tax rates for FY 2021-22 (AY 2022-23) was remained unchanged. Also the government. has raised the limit for tax audits under section 44AB from Five crores to Ten crore rupees (only where Ninty Five percent of payments are digitized), providing relief to several corporate houses.
The proposed amendments:
1. IT relaxation for senior citizens of seventy-five years ago and more than it.
2. Reduction in time for IT Proceedings.
3. Constitution of ‘Dispute Resolution Committee.
4. National Faceless Income Tax Appellate Tribunal Centre.
5. Tax incentives to Startups.
6. Relaxations to NRI's.
7. Pre-filing of returns to be forefront.
8. Advance Tax on dividend financial gain.
9. Disallowance of PF contribution.
10. Section 43CA stands amended.
11. Amendment to Section 44ADA.
12. Section 80EEA deduction extended.
Union Budget 2021 - How Retail Investors and Taxpayers Will be Affected?
Tax Leak Plugged:
1. The budget has also placed a cap on the Provident fund contribution that will earn tax-free income.
2. A big chunk of people subsequently contribute considerable sums to the Provident Fund to gain tax-free interest. Rs 2.5 Lakh per year, is now the upper limit. Also, the Union Budget has plugged a significant tax leak by this decision.
Unified Securities Market Code:
1. Before Union Budget 2021, multiple acts were overseeing the capital markets. Moreover, some of them were the securities contracts (Regulations) Act, Depositories Act, securities and exchange board of India Act, and Government Securities Act.
2. This Union budget unifies all these acts under one 'Unified Securities Market Code.' These would also help the market to boost business and cut compliance costs. Due to these proposed changes, there will be a significant reduction in clashes due to multiple rules and acts.
Investor Charter & Sebi as Gold Exchange Regulator:
1. Union Budget 2021 also includes an Investor Charter for the protection of investors. Consequently, the charter would consist of the rights of financial investors across all the financial services.
2. Inclusion of Exchanges that trade in gold under SEBI. Furthermore, the plan is to set up a bullion exchange. Also, a regulator for this kind of exchange will indicate quality assurance, risk management, high-quality settlement, and clearing.
3. It would also help to create order in the market and standardize a few processes, ultimately instilling confidence in the investors.
Tax Benefits On Affordable Home Loans:
Union budget 2020 extended the tax benefit on affordable home loans for another year. People over 75 with only pension and interest as their income source are not required to pay Income tax as per the union budget, which is a major relief for senior citizens.
Reforms In Advance Tax On Dividend Income:
1. The advance tax payment on dividend income after the dividend payment declaration is also publicly announced.
2. There has been a lot of uncertainty and chaos among taxpayers while paying advance tax as the quantum of dividend is unpredictable to a great extent.
Reforms For Tax Payers:
1. There are few changes proposed in the tax ecosystem as well. Furthermore, one of the changes was introducing tax forms pre-filled with capital gains, interest income, and few other details.
2. Also, one major change was for senior citizens above 75 years of age. Also, such citizens who only have a pension and interest income don’t have to file income tax returns.
3. To boost dispute resolution and minimize discomfort, the government has proposed a faceless dispute resolution mechanism for small-taxpayers.
4. These income tax reforms in the union budget will subsequently help to push transparency and help minimize frauds and bribery. Moreover, the government has also proposed to decrease the timeline for re-opening of the tax cases from the present 6 years to now 3 years only. This particular move may help decrease litigation delays for taxpayers.
The budget 2021-2022 takes a practical approach to growth with a focus on hard gains of fiscal rectitude. The motive of the Union Budget is to subsequently bring about the fast and very balanced economic growth of our country with emphasis on social justice and equality. Also, the major decisions are related to Education& Health, Agriculture, Corporate Tax, NRI Tax, and Income Tax and the union budget has further fuelled new aspirations for a better India.
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