Delhi, February 1, 2021: Union Finance Minister Nirmala Sitharaman on Monday presented Union Budget 2021 in Lok Sabha, using a Made in India tablet to deliver a paperless Budget address, and ditching the usual bahi khata.
The Budget 2021 is also special as it was presented in challenging circumstances amidst the Covid-19 pandemic.
Sitharaman in her budget speech quoted Rabindranath Tagore, “Faith is the bird that feels the light and sings when the dawn is still dark” to say that the budget this time was prepared in circumstances like never before.
Presenting the Budget 2021, Sitharaman said in the history of independent India, only three times has the Union Budget followed a GDP.
Budget 2021 focus
Budget 2021 focused on infrastructure development to boost growth and create jobs.
However, there has been no relief for the middle class as I-T slabs remain unchanged.
While some major tax changes were expected in the Union Budget 2021, only incremental benefits have been announced.
Budget 2021 announces exemption for senior citizens
Senior citizens above the age of 75 with only pension and interest income will not be exempted from filing income tax returns.
“For senior citizens who only have pension and interest income, I propose exemption from filing their income tax returns. The paying bank will deduct the necessary tax on their income,” said Sitharaman.
Ease in compliance
Another interesting proposal proposed by the finance minister is increasing compliance. At present, an assessment can be re-opened up to six years and in serious tax fraud cases for up to 10 years.
To make the task easier for taxpayers, Nirmala Sitharaman has proposed to reduce the time limit for reopening of assessment to three years from the present six years.
“In serious tax evasion cases too, only where there is evidence of concealment of income of Rs 50 lakh or more in a year, can the assessment be reopened up to 10 years. Even this reopening can be done only after the approval of the Principal Chief Commissioner, the highest level of the Income Tax Department,” Sitharaman said.
Quicker tax dispute resolution, says Budget 2021
The government has also come out with a proposal to set up a dispute resolution committee to quickly settle long-pending tax disputes.
“To further reduce litigation for small taxpayers, I propose to constitute a Dispute Resolution Committee for them, which will be faceless to ensure efficiency, transparency and accountability. Anyone with a taxable income up to Rs 50 lakh and disputed income up to Rs 10 lakh shall be eligible to approach the Committee,” Sitharaman said.
Widening faceless assessment
To further ease compliance in tax assessment, Finance Minister Nirmala Sitharaman proposed to make the Income Tax Appellate Tribunal (ITAT) faceless. “I now propose to make this Tribunal faceless. We shall establish a National Faceless Income Tax Appellate Tribunal Centre. All communication between the Tribunal and the appellant shall be electronic. Where personal hearing is needed, it shall be done through video-conferencing,” she said.
Tax relief extended for affordable housing in Budget 2021
Homebuyers have also got some tax relief in Budget 2021. The additional deduction of interest worth Rs 1.5 lakh for loans taken to purchase affordable houses has been extended for one more year to March 31, 20202. “Further, to keep up the supply of affordable houses, I propose that affordable housing projects can avail a tax holiday for one more year till 31st March, 2022,” Sitharaman said.
As the Budget for FY21-22 is announced, many commodities are set to become more expensive and some items of daily use will have revised prices.
Let’s take a look.
Here’s what gets costlier and what gets cheaper
- Mobile phones
- Power banks
- Imported raw silk
- Solar inverters
- Leather items
- Imported Gemstones
- Tunnel boring machines
- Kabuli chana, Pulses
- Imported Auto parts
- Nylon clothes
- Copper items
- Leather goods
- Gold & Silver
- Agricultural equipment
During her Budget speech, the finance Minister announced a 2.5 per cent increase in customs duty on mobile chargers and some sub-parts of phones, a move that will make phones more expensive.
“Withdrawing exemptions on parts of chargers and mobile phones will boost local manufacturing of smartphones. Domestic electronic manufacturing has grown rapidly. We are now exporting items like mobiles and chargers,” Sitharaman said in Parliament.
Meanwhile, Sitharaman also proposed a Rs 1,500 crore scheme during her
On the sidelines, Union Petroleum Minister Dharmendra Pradhan shared some interesting and lesser known facts about the Union Budgets.