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THE INDIAN BUDGET

Every year budget comes, but this year the hype for the annual Union Budget was sky high. It has been a major buzzing topic amongst the people of the country. Also why not , after all it affects the lifestyle of the citizens directly. But, the reason why this year's budget was in headlines is because ,this was the first post pandemic budget session of the country. The country not only suffered from the pandemic but also saw the stagnant and depriving economic status which became a major cause of headache for the whole nation. We can even compare the situation of the country to a man with few pennies in his pocket. Especially during the first phase where GDP growth shrunk to negative figures. It was a rock hard taks for the govt. to relive the economy.

This year's Budget can also be marked as a historical step in the books as this was the very first time the financial minister replaced the 'BAHI KHATA' which was an ongoing tradition with a made in India tablet. The nation sees it as a great move towards the 'DIGITAL INDIA' initiative.

The Union Budget 2021-22 was presented by our Finance Minister Nirmala Sitharaman on 1st February 2021 in the Parliament. The Budget speech was given by the Finance Minister from 11 a.m. to 1 p.m. This year’s Budget primarily focuses on the seven 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. Regulations around the securities market are proposed to be merged as a single code.

Some of the Budget highlights of 2020-2021 are-

*1) Economic Reforms and Schemes-*

The overall capital expenditure for Financial Year 21-22 is Rs.5.54 lakh crore. Since the healthcare sector’s improvement is of utmost importance, FM proposed a new centrally sponsored scheme, *PM Aatmanirbhar Swasth Bharat Yojana*, with an outlay of about Rs.64,180 crore over six years.

Also, 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 strengthen the existing national health institutions, National Centre for Disease Control (NCDC), Health Emergency Operation Centers and mobile hospitals. One of the major highlights was the increase in the FDI limits in the insurance sector from 49% to 74%. The government also plans to divest two PSUs as well as one insurance company.

*3) Indirect Tax Proposals -*

1) New tariff 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 tariffs with effect from 1st January 2022.

2) Agriculture Infrastructure And Development Cess (AIDC) has been imposedon petrol and diesel at Rs.2.5 and Rs.4 per litre respectively.

3) The customs duty is increased on cotton, silks, alcohol, etc.

4) Exemption of Social Welfare Surcharge on the value of AIDC has been imposed on gold and silver.

6)A new initiative called ‘Turant Customs’ will be introduced for faceless, paperless customs measures.

5) The exemption on import of leather will be withdrawn as they are produced domestically.

*2) Direct tax proposals* -

_1) Income Tax relaxtion for seniors of age 75 years 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 sources of income. Section 194P has been 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.

_2) Reduction in time for IT Proceedings_

Except in the cases of major 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.

_3)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 Dispute Resolution Committee under section 245MA. It will prevent new disputes and settle the issue at the initial stage.

_4)National Faceless Income Tax Appellate Tribunal Centre:_

A new provision is made for faceless proceedings before the Income Tax Appellate Tribunal (ITAT) in a jurisdiction less manner. It will cut the cost of compliance for taxpayers, and increase transparency in the disposal.

_5)Tax incentives to the startups:_

The tax holiday for startups has been extended up to 31st March 2022.

_6) Relaxations given to NRI:_

There is a proposal to notify regulations for removing hardship for double taxation.

_7)Pre-filing of returns to be forefront:_

Pre-filling will be allowed for salary, tax payments, TDS. Further, details of capital gains from listed securities, dividend income, etc. will have to be prefilled.

_8) Advance Tax on the dividend income:_

Advance tax will be applicable on dividend income only after its declaration. Tax holidays are proposed for rental companies.

_9) Disallowance of Provident Fund 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 employer.

7)CGST Act was amended for several provisions.