In this 21st Century, India has presented for the first time its Digital Budget for the Financial year 2021-22was finally tabled by the Modi Government. The Cabinet chaired by Prime Minister Narendra Modi has approved the Budget for the Fiscal year 2021-22, prepared by finance Minister’s NirmalaSitharamanand announces the reforms in fields of Government Earnings, Spendings, Taxes, Agriculture, Companies, FDI & Disinvestments and Health and sanitization in the global pandemic times where Covid-19 continues to persist.
UNION BUDGET HIGHLIGHTS 2021-2022
Nirmala Sitharaman identified eight areas of focus for the Union Budget 2021-22 as the “Sankalp of NATION FIRST”.
- Health and Well-Being.
- Physical and Financial capital and infrastructure.
- Inclusive Development for Aspirational India.
- Reinvigorating Human Capital.
- Innovation and R&D.
- Minimum government Maximum governance.
The main Highlights of the Budget 2021-22 are
BUDGET 2021-22 ON DIRECT TAX
- The time limit to reopen the assessment procedures under the Income Tax Act is reduced from 6 years to 3 years. For serious tax evasion evidence of Rs 50 Lakhs or more time limit for reopening is within 10 years. Deposit Insurance cover (DICGC Act 1961 to be amended). Easy and time-bound access of deposits to help depositors of stress banks.
- Senior Citizens: Reduced Compliance burden 75 years and above. Proposal not to file ITR if only pension income and interest income.
- National Faceless Income Tax Appellate Tribunal Centre: National Income Tax Appellate Tribunal for faceless ITAT Appeals personal hearing through Video conferencing
- Relaxations to NRI: Propose to notify rules for removing hardship for double taxation.
- Exemption from Audit u/s 44AB of Income Tax Act: The tax audit limit was Rs.5 crore in 2020. To further incentivize, the limit is increased to Rs.10 crore where digital/bank transactions account for 95%. Tax Audit Limit: Proposal of tax audit increased from 5 Cr. to 10 cr. (Only for 95% digitized payments business)
- Advance Tax liability on dividend income shall arise only after declaration or payment of dividend.
- Additional interest u/s 80EEA of up to 1.5 lakhs to be extended to loans on affordable housing taken up to 31st March 2022. Propose to include tax holidays for Aircraft leasing Companies.
- Prefilling of returns (Salary, Tax payments, TDS, etc.) Details of Capital gains from listed Securities, dividend income, etc. will be prefilled
- Small Charitable Trusts. Increased from 1 crore to 5 crores (Compliance limit)
- Late deposit of employee’s contribution by the employer will not be allowed as deduction.
- The incentive to startup: Tax holiday exemption for one more year.
- Duties reduced on various textile, chemicals, and other products.
- Gold and Silver (BCD reduced)
- Agriculture Products: Custom duty increased on cotton, silks, alcohol etc.
- Reduction in time for IT Proceedings: Reopening of Assessments period reduced from 6 years to 3 years except in cases of serious tax evasion cases Proposal to constitute ‘Dispute Resolution Committee’.(Taxable income 50 lakhs and disputed income 10 lakh).
- No income tax filing required for seniors citizens above 75 years of age and who have income only from pension and interest income: FM.
BUDGET 2021-22 ON COMPANIES
- Proposal to revive definition of ‘Small Companies’ under Companies Act 2013. Capital less than 2 Cr. and Turnover Less than 20 Cr.
- Disinvestment: IPO of LIC, Announced Disinvestment of Companies will be completed in FY 2021-22
- No limit on One person Company
- Provision for Decriminalization of LLPs to be introduced earliest
- NCLT e-courts Soon to be introduced
- MCA21 version 3.0, soon to be introduced
- E-Scrutiny, E-process, etc.
KEY HIGHLIGHTS OF BUDGET 2021-22
- FM allocates ₹3,726 crores for the forthcoming Census which will be the first digital census.
- Government proposes to introduce National Nursing and Midwifery Commission Bill.
- Fiscal deficit for FY22 pegged at 6.8%: FM.
- Fiscal deficit for FY21 pegged at 9.5%: FM.
- Maintained quality of expenditure: FM.
- Agriculture procurement has increased steadily, benefiting farmers, says FM amid opposition slogan shouting against three farm laws.
- Government committed to the welfare of farmers, says FM Sitharaman.
- Barring four strategic areas, PSUs in other sectors will be divested, says FM announcing a new disinvestment policy.
- Agriculture credit target at 16.5 lakh crore: FM.
- Government allots ₹20,000 crores for bank recapitalization: FM.
- FDI in insurance increased to 74 pc from 49 pc: FM.
- Government proposes investor charter across financial products: FM.
- A scheme for promoting the flagging of merchant ships in India will be launched by providing subsidy support: FM.
- Government proposes a national language translation initiative.
- Government proposes deep ocean mission with an outlay of more than ₹4,000 cr over five years: FM.
- ₹1,000 crores to be provided for the welfare of tea workers: FM.
- Farmers paid ₹75,100 cr on wheat MSP in FY21: FM.
- Social security benefits to be extended to gig and platform workers for the first time. Minimum wages will apply to all categories of workers: FM.
- Government proposes to launch a hydrogen energy mission next fiscal for generating hydrogen from green power sources: FM.
- The government on Monday announced the JalJeevan mission with an outlay of ₹2.87 lakh crore for 4,378 urban local bodies.
- Centre to provide ₹18,000 crores for public buses, announces FM NirmalaSithraman.
- City gas distribution network of providing CNG to automobiles and piped cooking gas to households in 100 more districts: FM.
- For a 5-trillion dollar economy, our manufacturing sector has to grow in double digits on a sustained basis. Our manufacturing companies need to become an integral part of global supply chains: Finance Minister Nirmala Sitharaman.
- FM announces 7 port projects worth more than ₹2,000 cr via PPA mode.
- Pipelines of GAIL (India) Ltd, Indian Oil Corp (IOC), and HPCL will be monetized: FM.
- The framework will be put in place to allow electricity consumers to choose from more than one Distribution Company: FM.
- Finance Minister says 100 pc electrification of broad gauge rail tracks by December 2023.
- Ujjwala Scheme will be extended to cover 1 cr more beneficiaries. Will add 100 more districts in the next 3 years for city gas distribution: FM
- Nifty climbs above 13,800 as FM Nirmala Sitharaman presents Union Budget 2021. Sensex up 700-points.
- NHAI has sponsored one InVit to attract investors. Thus 5 operational roads with ₹5,000 crore value being transferred to NHAI InVit. NHAI operational roll roads are to be monetized: FM.
- Meanwhile, Railways will monetize dedicated freight corridor after commissioning. The next lot of airports will also be monetized for operations and management. AAI airports in tier-2,3 cities and other railway assets are to be monetized: FM.
- Indian Railways has prepared a national railways plan by 2030. It will bring down the logistics cost: FM Sitharaman.
- National Infrastructure Pipeline has been expanded to 7,400 projects. Further, projects worth ₹1.1 lakh crore have been completed under the National Infra Pipeline. We will also introduce bill to set up DFI providing ₹20,000 crores to launch the National Asset Monetisation Pipeline to fund new infra projects: FM Sitharaman.
- Highway infra work proposed include building 8,500-km of highways by March 2022.
- 3,500 km corridor in Tamil Nadu
- 1,100 km in Kerala at an investment of ₹65,000 cr
- 675 km in West Bengal at a cost of ₹95,000 cr
- 1,300 km in Assam in the next 3 years
- For 2021-22, proposes a sharp increase in Capital Expenditure & thus have provided ₹5.54 lakh crores which are 34.5% more than the BE 2020-21: FM Nirmala Sitharaman
- The outlay of ₹1.18 lakh crore for Ministry Of Road Transport And Highways: FM Sitharaman.
- The government has committed ₹1.97 lakh crore for PLI schemes covering 13 sectors. Further, 7 textile parks will be launched over three years: FM Sitharaman.
- Urban Swachh Bharat 2.0 Mission to be launched at outlay of ₹1.41 lakh crore over 5 years: FM Sitharaman.
- Finance minister Nirmala Sitharaman announced ₹35,000 crores for Covid-19 vaccines.
- Finance minister Nirmala Sitharaman announced ₹2,83,846 lakh crore for the health and wellness sector which also includes ₹35,000 crore for Covid-19 vaccines.
- Voluntary scrapping policy announced based on fitness test — 20 years in a personal vehicle and 15 years for the commercial vehicle. More details to be available soon.
- Introduction of the AatmaNirbhar Health Yojana with an outlay of ₹64,180 crores over six years. This will strengthen the National Centre for Disease Control. Besides this, the government will also set up 15 Health Emergency Centres: FM.
- Union Budget 2021 live: India Budget 2021: Six pillars of Budget
- Health and wellbeing
- Infrastructure
- Inclusive development
- Development of human capital
- Research and development
- Minimum government, maximum governance
- Seeing revival in the economy; Government fully prepared to support & facilitate the economic reset: FM.
- The Govt. stretched its resources for the benefit of the poorest of the poor. The PM GaribKalyanYojana, the three AatmaNirbhar Bharat packages, and subsequent announcements were like five mini-budgets in themselves: FM Nirmala Sitharaman.
- Faith is the bird that feels the light when the dawn is still dark, FM quotes Tagore.
- The total financial impact of all AatmaNirbhar Bharat packages, including measures taken by the RBI, was about ₹ 27.1 lakh crore, more than 13% of GDP: FM.
- Today India has 2 vaccines available and has begun safeguarding not only her own citizens against COVID 19 but also those of 100 or more countries. It has added comfort to know that 2 more vaccines are also expected soon: FM.
- The preparation of this Budget was undertaken in circumstances like never before, in view of calamities that have affected a country or a region within a country. But what we have endured with COVID-19 to 2020 is Sui generis: FM Nirmala Sitharaman.
- Express my gratitude to frontline warriors: FM.
- The global economy, which was slowing down, was pushed into uncertainty due to COVID-19. The risk of not having a lockdown was far more, far too high: FM.
- India’s factory activity expanded at its strongest pace in three months in January, fuelled by a continued recovery in demand and output, according to a private survey which also showed firms cut jobs at the slowest pace in 10 months.
- Rupee rises 7 paise to 72.89 against US dollar in early trade.
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