FINANCE MINISTER PRESENTED BUDGET 2020-21 (PART-2)
FIRST EVER PAPERLESS BUDGET 2021
The Union Budget 2021 will go paperless this year for the first time since India's Independence. The Budget will be like never before and will be delivered in a paperless format. No hard copies of the Budget 2021 will be printed due to the COVID-19 pandemic. The Finance Ministry has launched the 'Union Budget app' to enable smooth access to Budget-related documents. The app can be easily downloaded from the app store in both Android and Apple smart phones. All documents will be available for download after the Finance Minister's speech at the Parliament. The Union Budget is printed every year in the finance ministry's in-house press, involving around 100 employees of the ministry who have to stay together for almost 15 days till the papers are printed, sealed and delivered on the day of the Budget. The tradition will not be followed this year for the first time, taking into consideration the Covid-19 pandemic and the peak in the number of cases again.
The government has decided to share soft copies of the Budget instead. The Budget papers including both the Union Budget and Economic Survey will not be printed and soft copies will be provided. All members of the Parliament will receive the soft copies of the Union Budget. In a significant development, the Finance Ministry launched the ‘Union Budget’ app during the symbolic ‘Halwa Ceremony to enable users to easily download and access budget documents. This is not the first time that there would be a change in tradition in the budget presentation under Finance Minister Nirmala Sitharaman. She had previously done away with the colonial-era tradition of carrying Budget papers in a briefcase and introduced the Budget 'Bahi Khata' or a ledger, enclosed in a red cloth folder and tied with a string.
INCOME TAX BUDGET 2021
The Union Budget 2021 has been presented by Finance Minister Nirmala Sitharaman on February 1, 2021, at 11 am. Amid the high expectations from the ‘budget like no other’, as promised by the Finance Minister, the budget doesn't see any change in the income tax structure. After the economic destruction caused by the COVID-19 pandemic in 2020 which greatly impacted almost every sector, the salaried individuals were of the hope that the government might bring some tax advantages with Budget 2021. However, the government has bought some relief for the senior citizens above the age of 75 years as well as has decided to introduce National Faceless Income Tax Tribunal. Read below to know more about the announcements made by the Finance Minister regarding the tax structure.
MAJOR ANNOUNCEMENTS BY FINANCE MINISTER
Senior Citizens of 75 age and above: Exemption from filing the Income Tax Return. The citizens above the age of 75 years with a pension income have been exempted from filing the Income Tax Return. There will be new rules for the removal of double taxation for NRIs. They will also be allowed to operate One Person Companies in India.
National Faceless Income Tax Tribunal: A faceless dispute redressal will be set up for the small taxpayers. Increase in the tax audit limit from 5 crores to 10 crores, announced Finance Minister. While announcing the incentives, Finance Minister Nirmala Sitharaman has announced that the affordable housing projects will be able to avail tax holiday till March 31, 2022. For further easing the filing of Income Tax Returns, details of capital gains and interest from banks, post offices, etc. will be pre-filled.
Late deposit of employee's contribution to the Provident Fund by the employer will not be allowed as the deduction to the employer. The Finance Minister has also announced the advanced tax liability on the dividend income will arise after the declaration of payment of dividends.
TAX EXEMPTION EXTENDED ON AFFORDABLE HOUSING
In order to boost consumption and growth, Finance Minister Nirmala Sitharaman in Budget 2021 announced the extension of tax exemption on affordable housing for a year. Highlighting 'affordable housing' and 'Housing for all' as a priority area, the government extended the eligibility of tax deduction till March 31, 2021. In the Budget of July 2019, the government had provided an additional income tax deduction of up to Rs. 1.5 lakhs for home loans to purchase affordable housing. In order to ensure affordable housing for the migrant workers, the finance minister also announced the tax holiday extension for one more year for affordable rental housing projects. Under serious tax evasion cases, only if there is evidence of concealment of income of Rs. 50 lakh or more in a year, the reassessment can be opened for 10 years. For others, the reopening of the assessment will only be for 3 years.
CHANGES IN CUSTOM DUTY
The custom duty on copper has been reduced to 2.5%. For encouraging domestic value addition of the chemicals, the customs duty on Naptha has been reduced to 2.5%. Custom Duty on silver and gold will be rationalized. The custom duties on the imported solar inverters have been increased from 5% to 20% and on solar lanterns; it has been increased from 5% to 15%. There will be 5% customs duty on all the nylon products. There will be a customs duty of 7% on Tunnel Boring Machines. To benefit farmers, the government has decided to raise the customs duty on cotton from 0 to 10%.
