Key Highlights from India’s Union Budget 2021

The following are the Key Highlights from the Union Budget 2021, as presented by the Hon’ble Finance Minister of India, Nirmala Sitharaman

Direct Taxes

  • Citizens of age 75 years and above who have only Pension and Interest income – Need not file Income Tax Returns
  • Re-opening of Assessment to reduced to 3 years from 6 years. Only where evidence of concealment of Income of Rs. 50 lakhs or more – re-opening can be made upto 10 years & only with approval of Pr.CCIT.
  • Reducing Litigation for small tax payers – Constitution of Faceless Dispute Resolution Panel for people with Total Income upto Rs.50 lakh and disputed income of Rs.10 lakh
  • Income Tax Appellate Tribunal to become Faceless – Only electronic communication will be done
  • Relaxation to NRIs – Rules to remove hardship of Double Taxation
  • Vivad Se Viswas Scheme Last Date of filing extended to 28th February, 2021.
  • Tax Audit Limit to be increased to Rs.10 crores from Rs.5 crores for those having less than 5% cash transactions
  • Dividend Tax- Dividend will be exempt from TDS. Advance tax liability on dividend income will arise only after declaration or payment of dividend. For Foreign Investors – lower treaty rate benefit will be given.
  • Affordable Housing – Additional Interest deduction (Sec 80EEA) of Rs.1.5 lakhs to be extended for loans taken till 31st March, 2022.
  • Affordable Housing Projects – Tax Holiday extended till 31st March, 2022.
  • Tax Holiday for Capital Gains for Aircraft Leasing Companies and Tax Exemption to Lease paid to Foreign Persons
  • Pre-Filling of Returns – Details of Capital Gains, Dividend Income and Interest income will be pre-filled in the returns
  • Relief to Trusts – Charitable trusts running Hospitals and Educational Institutions relief increased from Rs.1 crore to Rs.5 crore.
  • Employee contribution not paid by employer will not be allowed as a deduction.
  • Tax holiday for Start-Ups extended to 31st March, 2022. Capital Gains exemption on investment in start ups also extended to 31s March, 2022.

MCA, Companies Act, LLP Act

  • Easing Compliance requirements of Small Companies – Threshold increased to Share Capital upto Rs.2 crore and Turnover upto Rs.20 crore will be Small Companies
  • Allow One Person Companies (OPC) to grow without any restriction in Share Capital or Turnover. NRIs will be allowed to set-up OPCs. Presence in India of 120 days in a year enough to start an OPC.
  • Launching MCA Version 3.0 – E-Scrutiny, E-Adjudication and Compliance management to be simplified.
  • Decriminalisation of LLP Act, 2008
  • Tribunals to be rationalised

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