Indian Budget 2021 | Top 10 frequent questions

There are NO major changes in tax rates for FY 2021-22. The Tax rates which were proposed by Budget 2020 are applicable for FY 2021-22 also. Taxpayers can follow either old regime with deductions or the new tax slabs without deductions.

Know more about Difference between Old Tax Regime and New Tax Regime.

Know your Tax exposure using Income Tax Calculator for FY 2021-22

Senior Citizens over 75 years of age and having only Pension and Interest are exempted from Filing Income Tax returns from FY 2021-22. The required taxes will be deducted by the Banks at the time of payment. In case, if Senior Citizens have any other sources of Income such as Capital Gains, Foreign Income etc, then these are required to file IT Returns

Know more on Senior Citizens to be exempted from filing ITR

The Threshold limit for Tax Audit has been increased to Rs 10 Crores from Rs 5 Crores if at least 95% of the business receipts and payments are made through electronic modes.

Note: If more than 5% of business receipts and payments are made through cash, then the Tax Audit limits remains unchanged. The Business is required to get Tax Audit if the turnover is more than Rs 1 Crore.

There are no such major changes in Deductions under Chapter VIA. Following are the deductions which are amended.

1. 80EEA: Deduction u/s 80EEA is allowed for the affordable housing loans taken before 31/03/2022 (For Individuals)
2. 80IAC: Deduction u/s 80IAC is allowed for all eligible start-up’s incorporated till 31/03/2022 (For Start-ups)
3. 80 IBA: Rental Housing projects can claim Deduction of an amount equal to 100% of profits and gains until 31/03/2022 (For Real Estate)

Finance Minister Nirmala Sitharaman, emphasized that no additional taxes to be levied but a proper enforcement should bring more tax revenues. In the same lines, few due dates were brought backward to bring seriousness to tax filing due dates.

Original return: There is no changes in Filing Original Income Tax Returns

Belated Returns: The Due date for Filing Belated return has been reduced by 3 months i.e., Belated returns can be filed till Dec 31 of respective Assessment year.

Revised Returns: The Due date for Filing Revised return has been reduced by 3 months i.e., Revised returns can be filed till Dec 31 of respective Assessment year

There are no such major changes in GST.

1. Govt is proposing to amend the definition of “Zero Rated Supplies”.
2. Mandatory Requirement of GST Audit certified by Professional is now removed. Filing GST Annual Return with Self Certification has been facilitated through GSTR-9

Finance Minister proposed to review more than 400 old exemptions under Customs Law. W.e.f Oct 2021, revised Custom tariff structure would be introduced.

• New customs duty exemptions to have validity up to the 31 st March following two years from its issue date
• Some exemptions on parts of chargers and sub-parts of mobiles withdrawn
• Duty on some parts of mobiles revised to 2.5% from ‘nil’ rate
• Customs duty reduced uniformly to 7.5% on semis, flat, and long products of non-alloy, alloy, and stainless steels
• Duty on steel scrap exempted up to 31 st March, 2022
• Anti-Dumping Duty (ADD) and Counter-Veiling Duty (CVD) revoked on certain steel products
• Duty on copper scrap reduced from 5% to 2.5%
• Basic Customs Duty (BCD) on caprolactam, nylon chips and nylon fiber & yarn reduced to 5%
• Custom duty on gold and silver to be rationalized
• Duty on steel screws and plastic builder wares increased to 15%
• Prawn feed to attract customs duty of 15% from earlier rate of 5%
• Exemption on import of duty-free items rationalized to incentivize exporters of garments, leather, and handicraft items
• Exemption on imports of certain kind of leathers withdrawn
• Customs duty on finished synthetic gemstones raised to encourage domestic processing
• Customs duty on cotton increased from nil to 10% and on raw silk and silk yarn from 10% to 15%.
• Withdrawal of end-use based concession on denatured ethyl alcohol
• Agriculture Infrastructure and Development Cess (AIDC) on a small number of items
• Tunnel boring machine to now attract a customs duty of 7.5%; and its parts a duty of 2.5%
• Duty on certain auto parts increased to general rate of 15%
• Phased manufacturing plan for solar cells and solar panels to be notified
• Duty on solar invertors raised from 5% to 20%, and on solar lanterns from 5% to 15% to encourage domestic production

The FM has announced some schemes for reducing disputes and simplifying Settlement.

• The Time Limit for re-opening cases has been reduced to 3 years from 6 years.
• If there is Concealment of Income of more than Rs 50 Lakhs or more in a year, the cases can be reopened until 10 years with the approval of Principal chief Commissioner.
• Vivad Se Vishwas Scheme has been extended till 28th February 2021 from 31st January 2021.
• Dispute Resolution Committee to be set up for taxpayers with taxable income up to Rs. 50 lakh and disputed income up to Rs. 10 lakhs

There are no changes in Residency rules for NRI’s but there is a positivity from FM in removing hardships faced by NRI in Claiming DTAA benefits and Income accrued in Foreign Retirement accounts. Rules are yet to be notified by FM

The Budget 2021 has provided the ease of compliance in Corporate affairs

• NRI's can incorporate OPC in India. The residency limit has been reduced to 120 days from 180 days.
• There will be no restrictions on Paid up Capital and Turnover.
• The Conversions from one entity type to another entity type can be done at any time.
• Easing Compliance requirement of Small companies by revising their definition under Companies Act, 2013 by increasing their thresholds for Paid up capital from “not exceeding Rs. 50 Lakh” to “not exceeding Rs. 2 Crore” and turnover from “not exceeding Rs. 2 Crore” to “not exceeding Rs. 20 Cr
• Launch of data analytics, artificial intelligence, machine learning driven MCA21 Version 3.0 in 2021-22 (new mca.gov.in portal)