BUDGET 2021 HIGHLIGHTS
> MSME sector as this sector is the back bone of the success of the economy & is allocated Rs. 15,700 crore for MSME. But considering the 63 Million MSME in India, this allocation is too low.
> Govt; had targeted to disinvest in PSU worth Rs. 1..75 Lacs crore, PSU like LIC & other profit-making PSU should not be disinvested*
> Creation of a Development Financial Institution (DFI) for which allocation of Rs 20,000 crore to capitalise it.The FM also announced that Rs 5,000 crore of road infra to be transferred to NHAI. Allocation to rural infra fund of Rs. 40,000/- crores.
> Taking the recapitalisation of banks forward, the FM has proposed Rs 20,000 crore for shoring up the capital of PSBs in order to cope with the bad loans that are expected to go up in the post-pandemic phase.
> 35,000 crores allocated for Covid Vaccine is a welcome move.
> Insurance FDI increase from 49% to 74% would bring more FDI in this sector.
A. Direct tax
We are moving towards a faceless / digital era of taxation, it would bring more transparency
> Reducing the time period to reopen the Reassessment, Dispute resolution committee, Faceless ITAT centre, Affordable Housing, : digital transactions from 5 cr to 10 cr would reduce complexities & litigation.
> Exemption slabs remain un changed.
> Extension of Vivad Se Viswas Scheme would reduce litigation.
> Non levy of any additional tax is also a relief for the Taxpayers.
> Tax Audit Limit in case of digital increased to Rs. 10 crores
B. Companies Act
Easing Compliance requirements of Small Companies would help small companies to grow and would motivate the new one to adopt OPC route
GST Audits are abolished, thereby reducing compliance Burdon
D. Direct tax proposals highlights
> Relief to senior citizen: for 75 years and above: Having only pension and interest income: exemption from filing ITR: Pension Paying banks will deduct TDS
> Reassessment: from 6 years to 3 years – 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.
> Dispute resolution committee: it will be faceless: anyone with total income less than 50 lacs and disputed income less than 10 Lacs can approach this committee
> Faceless ITAT: faceless ITAT centre will be set where personal hearings will be conducted through VC
> Tax Audits: digital transactions from 5 cr to 10 cr
> Advance tax liability on dividend will arise only after declaration of dividend
> Affordable Housing – Additional Interest deduction (Sec 80EEA) of Rs.1.50 lakhs to be extended for loans taken till 31st March, 2022.
> Affordable Housing Projects – Tax Holiday extended till 31st March, 2022.
> Tax incentive of affordable renting housing project. Additional deduction of interest payment up to Rs 1,50,000 for first-time buyers of affordable homes (under Section 80EEA)
> Pre filled income tax return will have pre filled data regarding Dividend, post office interest income, salary etc.
> Vivad Se Viswas Scheme Last Date of filing extended to 28th February, 2021.
> Trusts: educational and hospitals: limit increased from Rs.1 Cr to Rs. 5 crore (10(23C)
> Late deposit of employee contribution of PF will now be not allowed as deduction.
> Relaxation to NRIs – Rules to remove hardship of Double Taxation
> Tax holiday for Start-Ups extended to 31st March, 2022. Capital Gains exemption on investment in start ups also extended to 31s March, 2022.
E. 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 rationalized
> GST – Removal of mandatory requirement of Annual Accounts Audit & reconciliation statement
> Deposit Insurance cover (DICGC Act 1961 to be amended). Easy and time bound access of deposits to help depositors of stress banks.
> Disinvestment: IPO of LIC, Announced Disinvestment of Companies will be completed in FY 2021-22
> Duties reduced on various textile, chemicals and other products
> Gold and Silver (BCD reduced)
Agriculture Products: Custom duty increased on cottons, silks, alcohol etc.