Union Budget 2021-22: Key Things Like Financial Reforms And Tax Proposals You Need To Know About

Budget 2021-22 Highlights

On 1st February 2021, the Union Budget 2021-22 was presented by Finance Minister Nirmala Sitharaman in the parliament.

The budget speech, given from 11 a.m. to 1 p.m., by the Hon’ble Finance Minister laid the budget’s focus on pillars for economic revival.

The focus was on health and well being, inclusive development for aspirational India, Innovation and R&D, physical and financial capital infrastructure, minimum government maximum governance, and reinvigorate human capital.

Several direct and indirect tax amendments were also proposed in a single code.

See Also: Budget 2021: What Is In It For The Farmers?

Financial Reforms

A centrally sponsored scheme was proposed by the Finance Minister “PM Atamanirbhar Swasth Bharat Yojana” with an expenditure of almost ₹ 64,180 crores for over six years.

Overall ₹5.54 lakh crore capital expenditure for FY2021-22 is estimated and the Healthcare sector is under a requirement of an immediate improvement.

The estimated budget outlay for health and wellbeing has risen by 137% Y-o-Y (Year-over-Year Growth) basis, the estimated outlay is ₹2,23,846 crores for FY 2021-22.

An increase in the FDI limits in the Insurance sector is seen, which raised from 49 % to 74%.

An allocation is expected for an expanded and strengthened NCDC (National Centre for Disease Control), National Health Institutions,  Health Emergency Operation Centers, and the mobile hospitals.

The government has planned to strip down to power supply units and an Insurance Company.

Tax proposals

To provide relaxation to the taxpayers and start-ups up to some extent, some tax proposals were introduced while the individual and corporate tax rates were left unchanged.

Indirect Tax proposals:

  1. Copper scrap’s reduced duty from 5% to 2.5%
  2. An increase in a solar inverter’s duty from 5 % to 20%
  3. Reduction in high-speed diesel oil branded or unbranded while basic additional excise duty on petrol.
  4. Reduced basic custom duty on gold and silver
  5. Increased duty from 5% to 15% on solar lanterns
  6. NCCD, of 25%, imposed on tariff items under 2404 11 00 and 2404 19 00
  7. AIDC- Agriculture Infrastructure and Development Cess, on petrol at ₹ 2.5 per litre and diesel at ₹ 4 per litre
  8. An introduction of “TurantCustomers” for contactless paperless and the faceless customs measures
  9. Import of leather exemption will be withdrawn because of domestic production
  10. An increased customs duty on silk, alcohol, cotton, etc
  11. Import products like compressors refrigerators in air conditioners are set to get costlier

CGST Act amended:

  1. To provide a backdated interest charged on net cash liability is amended under Section 50 of CGST Act
  2. Section 16, which allowed the tax payer’s claim of the input tax credit, primarily based on GSTR-2A and GSTR-2B, is amended.
  3. Section 35 and Section 44 revised according to which the obligatory requirement where a specified professional has to furnish the GST reconciliation report is relaxed and the filing of an annual return on the basis of self-certification has been allowed. The category of taxpayers can be freed from the requirement of annual return filing by the Commissioner.

Direct Tax Proposals:

  1. Removal of double taxation hardship for NRI has been proposed
  2. Applicability of the advance tax will only be on the dividend income after the declaration
  3. The earlier time limit of six years has been reduced to three years for assessment proceedings but an exception is considered in case of serious tax avoidance.
  4. Relaxation is proposed for senior citizens of 75 years and above for filing income tax returns
  5. Tax incentives for various startups are proposed and a tax holiday is extended till 31st March 2022
  6. If the residential unit is made between 12th November 2020 and 30th June 2021 the stamp duty value can be up to one 20% which was previously 110 % of the consideration

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