The analysis of Budget is divided into 2 major categories: (a) Direct Tax (b) MCA, Companies Act, LLP Act.

The following are the Key Highlights from the Union Budget 2021, as presented by the Hon’ble Finance Minister.

Direct Taxes

  • Vivad Se Viswas Scheme Last Date of filing extended to 28th February, 2021.
  • Citizens of age 75 years and above who have only Pension and Interest income – Need not file Income Tax Returns
  • Re-opening of Assessment to reduced to 3 years from 6 years. Only where evidence of concealment of Income of Rs. 50 lakhs or more – re-opening can be made upto 10 years & only with approval of Pr.CCIT.
  • Reducing Litigation for small tax payers – Constitution of Faceless Dispute Resolution Panel for people with Total Income upto Rs.50 lakh and disputed income of Rs.10 lakh
  • Income Tax Appellate Tribunal to become Faceless – Only electronic communication will be done
  • Relaxation to NRIs – Rules to remove hardship of Double Taxation
  • Tax Audit Limit to be increased to Rs.10 crores from Rs.5 crores for those having less than 5% cash transactions
  • Dividend Tax- Dividend will be exempt from TDS. Advance tax liability on dividend income will arise only after declaration or payment of dividend. For Foreign Investors – lower treaty rate benefit will be given.
  • Affordable Housing – Additional Interest deduction (Sec 80EEA) of Rs.1.5 lakhs to be extended for loans taken till 31st March, 2022.
  • Affordable Housing Projects – Tax Holiday extended till 31st March, 2022.
  • Tax Holiday for Capital Gains for Aircraft Leasing Companies and Tax Exemption to Lease paid to Foreign Persons
  • Pre-Filling of Returns – Details of Capital Gains, Dividend Income and Interest income will be pre-filled in the returns
  • Relief to Trusts – Charitable trusts running Hospitals and Educational Institutions relief increased from Rs.1 crore to Rs.5 crore.
  • Employee contribution not paid by employer will not be allowed as a deduction.
  • Tax holiday for Start-Ups extended to 31st March, 2022. Capital Gains exemption on investment in start ups also extended to 31s March, 2022.

MCA, Companies Act, LLP Act

  • Easing Compliance requirements of Small Companies – Threshold increased to Share Capital upto Rs.2 crore and Turnover upto Rs.20 crore will be Small Companies
  • Allow One Person Companies (OPC) to grow without any restriction in Share Capital or Turnover. NRIs will be allowed to set-up OPCs. Presence in India of 120 days in a year enough to start an OPC.
  • Launching MCA Version 3.0 – E-Scrutiny, E-Adjudication and Compliance management to be simplified.
  • Decriminalisation of LLP Act, 2008
  • Tribunals to be rationalised

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Qualification: LL.B / Advocate
Company: IRC Agrochemicals Private Limited
Location: Kolkata, West Bengal, IN
Member Since: 01 Feb 2021 | Total Posts: 2

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February 2021