DECODING BUDGET 2021: THE FIRST LOOK
Accountability, Transparency and Simplicity is what the budget 2021 aims to achieve. Post COVID 19, the course has been set towards boosting the economy while focusing on growth and health care. The Govt has been treading this path the whole of 2020 and has presented what can be called mini budgets, which resonated with what has been presented today.
The financial markets have given a green signal to the budget, as they have shot up by more than 4%. A first of its kind, presented digitally on a tablet made in India, the budget 2021 is a sensible budget that focusses on six key areas for growth in healthcare, infrastructure, inclusive growth, human capital, R&D and maximum governance
Though the final picture would emerge soon, for now a few relevant highlights:
1. Fiscal deficit pegged at 9.5% of GDP for FY 21.
2. The Govt CAPEX is up from 4.39 lakh crore to 5.54 lakh crore.
3. Focus on healthcare, education and Infrastructure. 64,180 crores allocated for New health schemes.
4. 20000 crore recapitalisation of PSB’s.
5. The GST process to be smoothened and anomalies removed like inverted duty structure.
6. Government to provide Rs. 35000 crore for Covid 19 vaccine.
7. All securities market laws under one securities market code.
8. Under relief to senior citizens; individuals over 75 years dont need to file the income tax return if only pension and interest income is there.(more clarity to emerge later)
9. The reopening time for income tax assessments has been reduced to 3 years from present 6 years giving relief to assesses.
10. Continuing with their emphasis on transparent and faster resolution of disputes, Dispute resolution committee to be formed for small tax disputes under faceless resolution.
11. Vivad se Vishwas gets a further boost as now people with 50 lakhs income and tax assessment cases of upto 10 lakhs can approach the committee to take benefit under this scheme.
12. Giving a shot in the arm to the NRI, there is a proposal to amend the double taxation hardships.
13. The exemption limit for the audit cases has been increased from 5 crore to 10 crore providing relief from compliances(only for cases where digital payments are more than 95%)
14. DDT(dividend distribution tax) which has been mandatory on dividend received by investors would be exempted from TDS. No advance tax liability on same till declaration of dividend.
15. There is a proposal to have notified infrastructure debt funds which would be able to issue zero coupon bonds(further information is awaited)
16. Additional tax exemption of Rs. 1.5 lakhs on loans taken to purchase affordable housing have been extended upto March 2020.
17. Prefilled ITR forms to include the capital gain, dividend and interest income. (further information awaited).
Though it's too early to comment on the impact of this budget, as a first look it looks like a good one. More on this later.
For now though ‘Dil Maange more’, this is certainly a satisfying budget!
Anupama Bhargava
Partner Beekay Taxation & Investment LLP
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