Highlights of budget 2021
Fiscal Judgement and Management
- Total expenditure is pegged at Rs.34,83,236 crore up by 1% for FY22, whereas capital expenditure is set to see a whooping rise by 34.5% and 26.2% over FY21BE and FY21RE, respectively.
- The financial deficit is projected at 6.8% of GDP for 2021-22 BE with intent to reach a financial deficit level below 4.5% of GDP by 2025-26, with a fairly steady decline over the period. The fiscal deficit in RE 2020-21 is pegged at 9.5% of GDP.
Agriculture and Rural Economy
- Agricultural credit target enhanced to Rs 16.5 lakh crore in FY22, with a focus on increased credit, flows to animal husbandry, dairy, and fisheries.
- 33% increase in Rural Infrastructure Development Fund.
Infrastructure Outlay
- Dedicated Rs.1.1 lakh crore for Railways in FY22.
- An outlay of Rs.1.18 lakh crore for the Ministry of Road Transport and Highways.
- Rs.1.41 lakh crore for Urban Clean India Mission.
Healthcare Outlay
- Government to spend Rs.64,180 crore on healthcare over 6 years.
- Government Sets Aside Rs.35,000 Crore For The Covid-19 Vaccine In FY22.
Vehicles - Proposes voluntary Vehicle Scrappage Policy
- Rs.3.05 lakh crore outlay for the power sector.
- Highways projects in Tamil Nadu, Kerala, West Bengal, and Assam.
Company Related Matters
1. Definition of small companies amended by increasing threshold of paid-up capital to not exceeding 2 crores and turnover to not exceeding 20 crores
2. One person company can be set up within 120 days to give a boost to startups
3. NCLT to be strengthened by creating e-courts
4. MCA-21 3.0 to have e-scrutiny, e-consultation, and compliance management
5. IPO of LIC in 2022
6. SARFAESI, reduction of monetary limit from 50 lacs to 20 lacs
7. Non-resident individuals with entrepreneurial potential are now enabled to set up One Person Companies (OPC) with no paid-up capital and turnover restrictions, reducing registration timeline from 182 days to120 days
Financial Sector
1. Government to set up a professionally managed Development Financial Institution (DFI) to act as a provider, enabler, and catalyst for infrastructure financing.
2. Proposal for New Rationalised Securities Markets Code
3. NHAI and PGCIL to set up INVITs to attract global funds.
4. Increase the permissible FDI limit from 49% to 74% in Insurance Companies.
5. .Government allots Rs.20,000 crore for bank recapitalization.
6. Proposal to create a permanent institutional framework to instill confidence amongst the participants in the Corporate Bond Market and enhance liquidity.
Income tax Highlights -
Relief to senior citizens
1.Senior citizens with pension and interest income to be exempt from filing the income Assessments
2. Time limit of reopening of assessment to be reduced from 6 to 3 years
3. Proposes setting up Dispute Resolution Mechanism for small taxpayers
4. Tax audit limit increased from 5 crores to 10 crores
5. For ease of compliance, advance tax liability on dividend income to arise only after the declaration of dividend
6. Reduction of tax on dividend income at lower treaty rate for non-residents
7. Notified Infra Debt Fund can issue notified zero-coupon bonds
8. No TDS on RIET AND InvITs
9. Tax Exemptions for notified affordable rental housing projects
10. I-T return forms now to be pre-filled with Capital Gains and Bank Interest.
11. Details of capital gains on listed securities etc will be prefilled to aid ease of compliance
12. Late deposition of employees' contributions not to be allowed as a deduction to the employer.
13. Government to notify rules to eliminate the double tax for NRIs on foreign retirement funds
14. Exemption from tax audit to Rs.10 crore turnover for companies transacting on digital mode
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