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.
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
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
- 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.