Budget 2021: Highlights

Budget 2021 Highlights
Share This Post

Last updated on January 23rd, 2022 at 03:11 pm

Budget 2021: Highlights

The first budget of the new decade has been presented today, on 1st February 2021, Monday by  Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman Union Budget 2021. Announcements made through this Budget will be applicable for the Financial Year 2021-22 corresponding to Assessment Year 2022-23.

The budget this year is extremely critical from the point of view of revival of the economy as well as managing the taxpayer’s expectations at the outset of Covid-19 pandemic circumstances, which were like never before.

[poll id=”2″]

Halwa Ceremony held on 23rd January 2021

A new mobile application “Union Budget Mobile App” was launched. It will provide quick easy and hassle-free access to Union Budget information to all stakeholders. Click here to know the details to all the details about the mobile app.

Economic Survey 2020-21 on 29th January 2021

The theme of the Economic Survey 2020-21 #SavingLives&Livelihoods #VshapedRecovery was presented by India’s Chief Economic Advisor Shri Krishnamurthy Subramanian. A detailed assessment of the impact of the coronavirus pandemic on the Indian economy was presented in Volume I Volume II 

The government has also launched an official mobile app for the Economic Survey of India.

Highlights of Budget 2021

“Atmanirbhar” packages were like mini-budgets for covid- support which accelerated the reforms. Total covid supports packages announced before the Budget amount to Rs. 27.1 lakh crores.

Vision for Atmanirbhar Bharat –

The budget has been prepared considering 6 pillars of the economy – Health & Wellbeing, Physical and financial capital and Human capital & Infrastructure, Innovation & RD

Health & Wellbeing

The importance of Infrastructure was noted and Rs 64,180 crores has been outlayed for Atmanirbhar Swasth Bharat for over 6 years. Mishan Poshan 2.0 will be launched.

  • Waste Management and Air Pollution – Rs. 2270cr
  • Voluntary Vehicle scrapping policy announced

Physical and financial capital and Human capital & Infrastructure

Mega investment in 7 textile parks over 3 years.

  • Long-term debt financing – Development Financial Institution with Rs. 20000cr capital to be set up with a lending portfolio of 5 lakh crores in 5 years. Augmenting funds for infrastructure development.
  • Monetizing public infrastructure assets. National Asset monetization dashboard.
  • Capital Expenditure Rs. 5.54 lakh crores against 4.39lakh crores last year. Additionally more than 2 lakh cr for capital expenditure for states.
  • National corridors and infrastructure development for metro /rail as well as the road were announced
  • Power infrastructure – Hydrogen energy mission was announced.
  • Consolidation of Acts to create a single Securities Markets Code
  • To launch investor charter for investor protection.
  • Regulated Gold Exchanges proposed
  • FDI limit in Insurance proposed to be increased to 74% from 49%
  • FY 22 PSU Bank recapitalization plan to Rs 20,000 crores
  • To Incentivise startups, a one-person company with a relaxed capital limit proposed.
  • All divestments announced earlier will be completed by FY 22. The target of Rs 1.75 lakh crores from divestment.
  • To set up a separate administrative structure for co-operatives

Inclusive development for Aspirational India 

  • FM demonstrated that the government is promoting Agricultural development and enriching farmers by mentioning the payments to farmers in the current government’s tenor.
  • Boosted Agriculture and Poultry
  • Agri infra fund increased to 40,000 crores and will be available for APMC
  • Development for 5 National fishing
  • Social security benefits to be extended to all sectors

Regenerating Human capital

  • Setting up of Central University in Leh proposed for higher education in Ladakh
  • Bench-marking skill initiative with many countries

Innovation and R&D

  • Financial assistance earmarked for Digital payments developments
  • Research needs to be addressed

Fiscal deficit for FY 20-21 pegged at 9.5% of GDP

Fiscal deficit for FY 21-22 pegged at 6.8% of GDP

Revenue deficit grant for states at Rs 1.18 lakh crores

Direct Tax Proposals

  • Relief to Senior citizens (over 75yrs) – exemption to file tax returns if income consists only pension and interest income.
  • Re-opening of cases for concealment of income – period limited to 3 years. Only for concealment above Rs 50 lakh, 10 years.
  • Faceless ITAT for faceless dispute resolution
  • Relaxations to NRI – for the avoidance of Double taxation proposes to notify rules
  • The limit for tax Audit increased for 10 crores from 5 crores if digital payments 95%
  • Advance tax for dividend income only on declaration or receipt of dividend income by the recipient. Dividends will be exempt from TDS.
  • Infra debt funds can issue zero coupon tax saving bonds
  • Tax exemption for notified affordable rental housing projects
  • Tax holiday for capital gains for aircraft leasing companies
  • Pre-filled income tax returns for salaried as well as capital gains on securities, bank interest, etc
  • Tax holiday for startups – Capital gain exemption for Investment in startups extended by 1 more year
  • No deduction to the employer for late deposit of employee contribution of PF
  • Vivad Se Viswas Scheme Last Date of filing extended to 28th February 2021

Indirect Taxes  (Which amendments of GST proposed in Finance Act 2021 are notified??

  • GST collection in the last few months reached a record high.
  • GST Audit abolished.
  • A new condition is likely to be imposed for claiming the input tax credit.(Section 16(2)(aa).
  • Section 50 Interest on net tax liability will be made effective retrospectively.
  • Custom Duty Policies have been updated to ensure easy access to raw materials and value-added products.

Key Takeaways of 43rd GST Council Meeting as it met for the first time after the Budget 2021


Related Posts

CA Janhavi Phadnis


Disclaimer: The above content is for general info purpose only and does not constitute professional advice. The author/ website will not be liable for any inaccurate / incomplete information and any reliance you place on the content is strictly at your risk.

Follow us on Social Media by clicking below

Share This Post

Be the first to comment

Leave a Reply

Your email address will not be published.