The Hon’ble Finance Minister Nirmala Sitharaman on 1st February 2021 presented The Union Budget 2021-22 in the Parliament. Here in this article, we have covered the Important Highlights of the Union Budget 2021
Union Budget 2021 Key Highlights
1. MSMEs & Industry
- Collateral free loans for businesses
- Fund of funds will be set up for MSMEs
- Subordinate debt for MSMEs
- Disallowing global tenders of up to Rs 200 crore
- Change in definition of MSMEs
2. Tax Proposal
Tax relaxation for certain taxpayers and startups have been proposed in this budget, such as Income Tax relaxation for senior citizen of age 75 years or above. And Tax Audit limit has been increased from Rs 5 Cr to 10cr (Only where 95% of the payments are Digital). Following are the proposed amendments
• Reducing time limit for reopening of income tax assessment
Except in cases of serious tax evasion, assessment proceedings in the rest of the cases shall be reopened only up to three years, against the earlier time limit of six years.
• IT relaxation for senior citizens
Exemption from filing income tax returns for senior citizens (75 years and above) who only have a pension and interest income. The paying bank will deduct the necessary tax on their income
• Constitution of a Dispute Resolution Committee for small tax payers
Those assessed with a taxable income of up to Rs.50 lakh (for small and medium taxpayers) and any disputed income of Rs.10 lakh can approach this committee under section 245MA. It will prevent new disputes and settle the issue at the initial stage.
• Income Tax Appellate Tribunal to be made faceless
Provision is made for faceless proceedings before the Income Tax Appellate Tribunal (ITAT) in a jurisdiction less manner. It will reduce the cost of compliance for taxpayers, and increase transparency in the disposal of appeals. Further, it will also help achieve even distribution of work in different benches and ensure efficient administration.
• Eligibility for claiming tax holiday for start ups
The tax holiday for start-ups has been extended by one more year up to 31st March 2022.
• Increase in limit for tax audit
Increase in limit for tax audit for persons who carry out 95% of their transactions digitally
• Additional deduction of ?1.5 lakh shall be available for loans taken up till 31 March 2022 for purchase of affordable house
• Dividend payment to REIT/InvIT to be exempted from TDS
• Pre filling of returns will also cover capital gains from listed securities, dividend income, etc.
3. Indirect Tax Proposal
- Rationalisation of customs duty structure by eliminating outdated exemptions
- Support to MSMEs hit by recent sharp rise in iron and steel prices and relief to metal recyclers
- Rationalisation of duties on raw material inputs to manmade textiles
- Rationalisation of custom duty on gold and silver
- Increase in duty on solar invertors and lanterns to promote domestic production
- Agriculture Infrastructure and Development Cess on small number of items