Key Highlights from Budget 2021

The Union Budget of 2021 was presented in the Parliament by Hon’ble Finance Minister Smt. Nirmala Sitaraman. Here are the key Highlights from Budget 2021-

♦ FDI in insurance sector proposed to be hiked to 74% from 49% now

♦ Infrastructure Debt Funds shall be allowed to issue Zero Coupon Bond.

♦ Fitness test after 20 years for personal vehicles; after 15 years for commercial vehicles

♦ Strategic disinvestment of companies including BPCL, Air India, Pawan Hans, IDBI Bank, Container Corporation of India to be completed in 2021-22

♦ Government to bring LIC IPO this year

♦ Tax audit limit of 5 crores for assessee having more than 95% receipts and payments non cash increased to 10 crores.

♦ Seven ‘Textile Parks’ to be developed in the next 3 year

♦ Definition of small companies to be revised by raising capital base to Rs 2 cr from current limit of Rs 50 lakh and increase the threshold of maximum turnover from Rs 2 crore to Rs 20 crore.

♦ Social security benefits to be extended to gig and platform workers. Minimum wages will apply to all categories of workers and will be covered under ESIC.

♦ For Startup and Innovators- OPC without limit for Turnover or Paid-up capital

♦ Relief for Senior Citizens: 75 years and above with only Pension and Interest – No need to file Return. TDS will be deducted.

♦ Tax audit limit was Rs.5 crore in 2020. To further incentivise, the limit is increased to Rs.10 crore.

♦ MCA 21 version 3.0 will have additional module for e-scrutiny, e-adjudication

♦ Time limit to reopen the assessment procedures under the Income Tax Act is reduced from 6 years to 3 years

♦ Allowing NRIs to incorporate OPC in India, residency for a person setting up a One person company from 182 days to 128 days in India.

♦ Advance Tax liability on dividend income shall arise only after declaration or payment of dividend.

♦ 80EEA to be extended to loans taken up to 31st March 2022

♦ Reassessment be opened for 10 years only if evidence of concealment of income of Rs 50 lakh or more in a year

♦ Deducted PFs but not deposited by the employer. A late deposit will not be allowed as a deduction for the employer

♦ Salary, Tax Payments, TDS already pre-filled. Capital Gains, Dividend incomes, interest income will now be pre-filled

♦ 80IAC extended upto 31st march 2021

♦ Reduced duty on copper scrap from 5% to 2.5%

♦ BCD rates to be reduced to 5% on Textiles

♦ Custom duty to be rationalised for gold and silver

♦ Rising duty on solar invertors from 5% to 20% and solar lanterns from 5% to 15%

♦ Withdrawing exemption on import of leather as they are domestically produced

♦ Turant Customs initiative – faceless, paperless, and contactless customs measures’, and contactless customs measures.

♦ A dispute resolution committee shall be setup for small taxpayers with Income upto 50 lakhs and disputed income upto 10 lakhs.

♦ Deduction u/s 80IAC for start-ups shall be extended upto 31/3/22. Exemption for investment in start-up shall also be extended for one year.

♦ Late deposit of Employee Contribution to funds shall be disallowed for employer.

♦ All communication with ITAT shall be electronic providing for faceless appeal at ITAT

♦ Housing Loan interest deduction u/s 80EEA extended by one year for loans upto 31/3/22.

♦ Turnover limit for 10(23C) exemption for educational and medical trusts shall increase from 1 crore to 5 crores.

♦ Tax Exemption shall be provided for rental housing

♦ NRIs will get relief from difficulties due to difference in fiscal year and claim of foreign tax credit.