Budget 2021 Highlights : PDF Download, Key Takeaways, Important Points
The Union Budget 2021-22 was presented by the Hon’ble Finance Minister Nirmala Sitharaman on 1st February 2021 in the Parliament. The Budget speech was given by the FM from 11 a.m. to 1 p.m. This year’s Budget lays focus on the six pillars for reviving the economy – Health and Wellbeing, Physical and Financial Capital and Infrastructure, Inclusive Development for Aspirational India, Reinvigorating Human Capital, Innovation and R&D, and Minimum Government Maximum Governance. Several regulations around the securities market are proposed to be merged as a single code. Several direct taxes and indirect taxes amendments were also proposed.
Economic Reforms & Schemes – Budget highlights 2021
The overall capital expenditure for FY 2021-22 is Rs.5.54 lakh crore. Since the healthcare sector’s improvement is the need-of-the-hour, FM proposed a new centrally sponsored scheme, PM Aatmanirbhar Swasth Bharat Yojana, with an outlay of about Rs.64,180 crore over six years. Further, the Budget outlay for Health and Wellbeing is estimated to be Rs.2,23,846 crore for FY 2021-22, which is a rise by 137% Y-o-Y basis. The increased allocation is expected to expand and strengthen existing national health institutions, National Centre for Disease Control (NCDC), Health Emergency Operation Centers and mobile hospitals. Another major highlight was the increase in the FDI limits in the insurance sector from 49% to 74%. The government plans to divest two PSUs as well as one insurance company.
Direct Tax Proposals – Budget highlights 2021
IT relaxation for senior citizens of 75 years age and above:
It has been proposed to exempt the senior citizens from filing income tax returns if pension income and interest income are their only annual income source. Section 194P has been newly inserted to enforce the banks to deduct tax on senior citizens more than 75 years of age who have a pension and interest income from the bank.
Reduction in time for IT Proceedings:
Except in cases of serious tax evasion, assessment proceedings in the rest of the cases shall be reopened only up to three years, against the earlier time limit of six years.
Constitution of ‘Dispute Resolution Committee’:
Those assessed with a taxable income of up to Rs.50 lakh (for small and medium taxpayers) and any disputed income of Rs.10 lakh can approach this committee under section 245MA. It will prevent new disputes and settle the issue at the initial stage.
National Faceless Income Tax Appellate Tribunal Centre:
Provision is made for faceless proceedings before the Income Tax Appellate Tribunal (ITAT) in a jurisdiction less manner. It will reduce the cost of compliance for taxpayers, and increase transparency in the disposal of appeals. Further, it will also help achieve even distribution of work in different benches and ensure efficient administration.
Tax incentives to startups:
The tax holiday for startups has been extended by one more year up to 31st March 2022.
Relaxations to NRI:
There is a proposal to notify rules for removing hardship for double taxation.
Pre-filing of returns to be forefront:
Pre-filling will be allowed for salary, tax payments, TDS, etc. Further, details of capital gains from listed securities, dividend income, etc. will be prefilled.
Advance Tax on dividend income:
Advance tax will henceforth be applicable on dividend income only after its declaration. Tax holidays are proposed for aircraft leasing and rental companies.
Disallowance of PF contribution:
In case the employee’s PF contribution was deducted but not deposited by the employer, it will not be allowed as a deduction for the employer.
Section 43CA stands amended:
The stamp duty value can be up to 120% (earlier 110%) of the consideration if the transfer of “residential unit”, which means an independent housing unit is made between 12th November 2020 and 30th June 2021.
Amendment to Section 44ADA:
Section 44ADA applied to all the assessees being residents in India. Now onwards, it applies only to the resident individual, Hindu Undivided Family (HUF) or a partnership firm, other than LLP.
Section 80EEA deduction extended:
The affordable housing additional deduction was extended till 31st March 2022. The tax exemption has been granted for affordable rental projects.
Indirect Tax Proposals – Budget highlights 2021
Few of the items on which Customs Duty Rates are revised are as follows:
- Reduced duty on copper scrap from 5% to 2.5%
- Basic and Special additional excise duty on petrol and high-speed diesel oil (both branded and unbranded) is reduced
- Increased duty on solar inverters from 5% to 20%
- Raised duty on solar lanterns from 5% to 15%
- The basic customs duty on gold and silver reduced.
- The department will rationalise duty on textile, chemicals and other products
- The revised rates will be applicable from 2nd February 2021 onwards.
New tariff items under 2404 11 00 and 2404 19 00 have been inserted in accordance with upcoming HS 2022 nomenclature. Further, NCCD of 25% is prescribed on these tariff items with effect from 1st January 2022.
Agriculture Infrastructure And Development Cess (AIDC) has been newly imposed on petrol and diesel at Rs.2.5 and Rs.4 per litre respectively.
Regarding agricultural products, the customs duty is increased on cotton, silks, alcohol, etc.
Exemption of Social Welfare Surcharge on the value of AIDC imposed on gold and silver. Therefore, these items would attract surcharge at the normal rate, only on value plus basic customs duty.
The exemption on import of leather will be withdrawn as they are domestically produced.
A new initiative called ‘Turant Customs’ will be introduced for faceless, paperless, and contactless customs measures.
CGST Act was amended for several provisions as follows:
- Section 16 amended to allow taxpayers’ claim of the input tax credit based on GSTR-2A and GSTR-2B.
- Section 50 of the CGST Act is being amended to provide for a retrospective charge of interest on net cash liability with effect from the 1st July 2017.
- Section 35 and 44 amended: Mandatory requirement of furnishing the GST reconciliation report signed by the specified professional is relaxed by allowing the filing of annual return on a self-certification basis. The Commissioner can exempt a class of taxpayers from the requirement of filing the annual return.
Budget 2021 PDFs – Budget 2021
|Budget at a Glance||PDF Download|
|Budget Speech||PDF Download|
|Deficit Statistics||PDF Download|
|Transfer of Resources to States and Union Territories with Legislature||PDF Download|
|Budget Profile||PDF Download|
|Outlay on Major Schemes||PDF Download|
|Statement I – Consolidated Fund of India|
|Revenue Account – Receipts||PDF Download|
|Revenue Account – Disbursements||PDF Download|
|Capital Account – Receipts||PDF Download|
|Capital Account – Disbursements||PDF Download|
|Statement IA – Disbursements ‘Charged’ on the Consolidated Fund of India||PDF Download|
|Statement II – Contingency Fund of India – Net||PDF Download|
|Statement III – Public Account of India|
|Receipts & Expenditure of Union Territories without Legislature||PDF Download|
|Finance Bill||PDF Download|
|Budget Highlights (Key Features)||PDF Download|
|Introductory Note||PDF Download|
|Abstract of Receipts||PDF Download|
|Summary of Estimates of Tax, Non-Tax Revenue and Capital Receipts|
|I. Tax Revenue||PDF Download|
|II. Non-Tax Revenue||PDF Download|
|III. Capital Receipts||PDF Download|
|1. Trends in Receipts||PDF Download|
|2. Analysis of Tax and Non-Tax Revenue Receipts included in Annexure 1||PDF Download|
|3. Reconciliation between estimates of Receipts shown in Annual Financial Statement and Receipts Budget||PDF Download|
|4. Statement showing State-wise Distribution of Net Proceeds of Union Taxes and Duties for BE 2020-2021||PDF Download|
|4A. Statement showing State-wise Distribution of Net Proceeds of Union Taxes and Duties for RE 2019-2020||PDF Download|
|4B. Statement showing State-wise Distribution of Net Proceeds of Union Taxes and Duties for Actual 2018-2019||PDF Download|
|5. Tax Revenues raised but not realised (Principal Taxes)||PDF Download|
|6. Arrears of Non-Tax Revenue||PDF Download|
|7. Revenue impact of Tax Incentive under the Central Tax System: Financial Years 2018-19 and 2019-20||PDF Download|
|8. Sources and Application of National Small Savings Fund as on 31st March, 2020||PDF Download|
|PART-B ASSET AND LIABILITY STATEMENTS|
|1. Debt position of the Government of India||PDF Download|
|Expenditure Profile||PDF Download|
|Expenditure Budget||PDF Download|
|Demands for Grants of Central Government||PDF Download|
|Explanatory Notes||PDF Download|
|D.O. Letter from JS(TRU-I)||PDF Download|
|The Macro Economic Framework Statement|
|The Macro Economic Framework Statement||PDF Download|
|Medium Term Fiscal Policy cum Fiscal Policy Strategy Statement|
|Medium Term Fiscal Policy cum Fiscal Policy Strategy Statement||PDF Download|
|Output Outcome Framework for Schemes 2020-2021|
|Output Outcome Framework for Schemes 2020-2021||PDF Download|
Budget 2021 In-shorts
Finance Minister (FM) Nirmala Sitharaman has presented the Union Budget 2021 of India on the 1st of February, 2021. Here are the key Highlights from Budget 2021:
- Our Hon’ble Union Finance Minister nsitharaman has started presenting the Budget2021.
- Our FM starts the budget2021 announcement by mentioning the challenges during the pandemic and the vision of the Pradhan Mantri Garib Kalyan Yojana.
- FM says that India has two #COVID19 vaccines made available and two more will be made accessible soon.
- FM reiterated that the government is fully prepared to support the economy’s reset.
- FM says the Budget2021 is based on 6 pillars.
Starting with healthcare & wellbeing:
- Spending’s been increased
- New scheme with an outlay of Rs.64K crore to be spread over 6 yrs
- The above is in addition to the National Health Mission
- Support to rural & urban health centres
- FM announces the Jal Jeevan Mission with an outlay of 2.87 lakh crores aiming to provide full-fledged water supply to all urban local bodies with household tap connections.
- The FM proposed Rs1.41 lakh crores over a period of 5 Years for the Urban Swacch Bharath 2.0.
- An amount of Rs.1.47 lakh crores, over a 5-year-period, from 2021 has been assigned for initiatives such as wastewater treatment, reduction in plastic waster, reduction in pollution and the like.
- The Scrapping Policy has been announced in the Budget2021. The voluntary vehicle scrapping policy aims to remove inefficient vehicles so as to reduce vehicular pollution and oil import bills.
- FM proposes an amount of Rs.35000 crore to manufacture and make accessible the COVID19 vaccine.
- 2nd Pillar of Budget2021:
- Focus on physical, financial capital and infrastructure
- FM proposes an amount of Rs. 1.97 lakh crores, over 5 years, starting this FY to nurture global manufacturing champions and increase jobs for the youth
- FM has proposed a mega-investment textile park to be launched along with 7more textile parks to be established over the next 3 years.
- The FM proposes to set up a Development Financial Institution with an amount of Rs.5 lakh crores
- FM states that the Budget2021 will focus on the NHAI operational toll roads, airports in tier-2 and 3 cities, and sports stadiums
- The capital expenditure for the year 2021-22 will be 5.54 lakh crore with a 34.5% Y-o-Y growth rate.
- Our FM announced that more than Rs.2 lakh crores will be allocated for capital expenditure in the states and other autonomous bodies.
- FM announced that till date, a measure of 3,800 km highway-stretch has already been constructed and an additional km will be constructed under Bharat Mala project.
- The FM proposed the following National Highway budget for the below states:
- Tamil Nadu: 3500km @Rs. 1.03 lakh crores
- Kerala: 1100km @Rs.65,000 crores
- West Bengal: 675km @Rs.25,000 crores
- Also, National highway project of around 19,000 crores is in progress in Assam.Overall, the FM proposes a total of Rs.1,18,101 lakh crore for Ministry of Road Transport and Highways.
- An Infra-National Rail plan to prepare a future rail system in India by 2030 has been proposed to bring down logistics cost.
- The next few phases of metro projects will be taken up in Metro cities. Also in line are the ‘Metro Lite’ & ‘Metro New’ concepts for tier 1& 2 cities.
- The FM proposed to extend Ujjwala Scheme up to 1 crore beneficiaries from the existing 8 crore beneficiaries.
- The FM proposes to focus on the various allied laws of the securities market to be merged to the Securities Market Code.
- FM announced that the #SEBI will be notified to regulate the setting up and arrangement of the commodity market system.
- FM grants Rs.1,000 crores to the Solar Energy Corporation of India for the growth of the Solar Energy Sector.
- FM proposed to amend the Insurance Act to introduce additional FDI to insurance companies from the existing 49% to 74%.
- FM announces that a new Asset Reconstruction Company is to be set up to provide resolution to stressed assets in PSUs.
- The FM proposed to amend the DICGC Act, 1961 to streamline its provision where the depositors of the bank can get easy access to deposits through insurance in the case of a stressed bank.
- The FM announced that de-criminalization under the Companies Act, 2013 is complete and now the decriminalization of LLP Act, 2008 will be in force.
- Our FM modified the definition of small companies: companies with a paid-up capital not exceeding 2cr & a turnover not exceeding 20cr are to be considered small companies. Over 2 lakh+ companies benefit from this provision.
- For Startups and Innovators, the FM announced that the OPC can be incorporated without a limit for turnover or paid-up capital. This also allows NRIs to incorporate OPC in India.
- Our FM proposes a special framework for MSME.
- The FM announced that MCA 21 V3.0 to be introduced with additional modules for e-scrutiny and e-adjudication.
- FM stated that the IPO of the LIC will be carried out in FY 2021-22. Also, for the disinvestment strategy, two PSUs and 1 insurance company will be considered.
- The FM informed that the 15th Finance Commission’s recommendation is to rationalize and reduce centrally sponsored schemes.
- Pillar 3 of the Budget2021:Inclusive development for aspirational India
- In the Agriculture sector, the MSP regime has undergone a change to provide 1.5 times the product cost across all commodities.
- The total amount paid to wheat farmers was doubled in 2019-20 when compared to 203-14.
- The FM announced that agricultural credit will be increased to 16.5 lac crore.
- The FM proposed to enhance the scope of the ‘Operation Green Scheme’ to include 22 perishable crops, and 1.68 crore farmers have registered. Also, 1,000 mundis to be integrated under the said scheme.
- The FM stated that the government will take up the development of fishing harbors and fish landing centers along the banks of rivers and waterways.
- The FM announced that the ‘1 nation-1 ration card’ plan has been implemented by 32 States and UTs. Migrant workers benefit from this scheme as they can claim ration from anywhere in the country.
- The total fiscal deficit is pegged at 9.5 % of GDP and it is funded through govt borrowing. An additional 80,000 crore is needed to ensure our economy is given the needed push.
- The borrowings from the market for next year will be at 12 lakh crores.
- FM announced that the senior citizens who get only pension and interest on income are not required to file ITR.
- Reopening of assessment:
- In normal cases: the time limit has been reduced to 3 years from 6 years.
- In serious tax evasion cases: can be reopened till 10 years, only when concealment of income is more than 50 lakh.
- FM announced that the ‘Faceless dispute resolution committee and mechanism’ is set up to reduce litigations for small taxpayers. Any taxpayer with taxable income up to 50 lakh and disputed income up to 10 lakh can approach the committee.
- FM proposed a faceless Income Tax Appellate Tribunal (ITAT) for providing online resolution.
- The ‘tax audit limit’ under Section 44AB has been increased from Rs.10 crores to Rs.5 crores where 95% of business transactions are done in digital mode.
- The FM announced that the ‘advance tax liability’ on dividend income shall rise only after the declaration or payment of dividend.
- The FM announced that the deduction under section 80EEA is to be extended to loans taken up to 31st March 2022.
- FM announced that the affordable housing projects can avail tax holiday until 31 March 2022.
- FM announces tax incentives for the IFSC and tax holiday for aircraft leasing and rental companies.
- FM announces the pre-filled #ITR in Budget2021: Salary, Tax Payments, TDS are already pre-filled. Capital Gains, dividend incomes, and interest income will now be pre-filled.
- FM states that in case the PF amount was deducted but not deposited by the employer, it will not be allowed as a deduction for the employer.
- FM announces that the deduction under section 80IAC will be extended upto 31st March 2021.
- Under Indirect Taxation, the FM proposes to review 400 old exemptions this year through extensive consultations. After which a revised customs duty structure will be introduced.
- The FM has rationalized customs duty on copper, textile, gold and silver.
- The FM raised customs duty on solar inverters from 5% to 20% and solar lanterns from 5% to 15%.
- The FM proposed to withdraw exemption on import of leather as they are domestically produced.
- The FM proposes ‘Turant Customs’ initiative for faceless, paperless, and contactless customs measures.
- The FM concluded the Budget2021 and the house has been adjourned after getting the consent for the Finance Bill, 2021.