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Indian Budget 2021 Presentation

Indian Budget 2021 Presentation, Analysis

Indian Budget 2021 (#budget2021) is a testament towards a confident India and a progressive, resilient economy. Covering Budget 2021 Highlights, Key Takeaways & Analysis, Calculators, New Vs Old Personal Income Tax Regime from FY 2020-21, Expectations before Budget, what was a hit or miss?

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What is Budget?


A budget is a financial plan for a specified period say Year in general. The Government of India i.e., Ministry of Finance after consultation with all the other ministries prepares the annual budget. The budget will be generally presented by the Finance Minister on the first day of February in Parliament. The proposed budget will come into effect from April 1st of the respective year.

Expectations before Budget

Overall, Budget 2021 may focus on efforts to keep more money in the hands of the people to the spur demand. In other words, critical changes could be the rationalisation GST rates, and increase in Income Tax standard deduction.


List of expectations / recommendations for the Indian union budget of FY 2021-22 were  originally published on Jan 24th 2021 @ Indian Budget 2021 | Pre-Budget Expectations

Key Takeaways & Analysis


More emphasis on Infrastructure spending, raised customs duty to create jobs. No major changes to Taxes (Income Tax & GST)

  As expected by Team EZTax.in before the budget .. Budget 2021 has focussed to increase the importance for self-reliance in manufacturing, infrastructure, domestic service sector, and restrictions on imports by removing the exemptions on customs duty on some and adding additional duty on others. The theme of the budget is to increase the prospects in job creation and real assets in the society.

  Kick started the reforms in Insurance sector, allocated biggest budget ever to health care due to COVID-19 pandemic, though uncomfortable, allocated a massive budget towards infrastructure spending by borrowing from the markets. Removed the tax audit requirement for most of the SME sector whose turnover up to 10 crores. Promotion of Digital Currency etc.


  What are we missing ? Rationalisation in GST slab rates to promote some and discourage import oriented goods and/or services. Expectation on giving larger incentives for MSME sector who are desperately need of cash to re-engage with their businesses.

Top 10 frequent questions on Budget 2021

more @ Indian Budget 2021 | Top 10 frequent questions

Budget 2021 Highlights


Taxes in General

  1. Fiscal deficit in BE 2021-22 is pegged at 6.8%. Fiscal deficit increase to 9.5% of the GDP during 2020-21 due to COVID-19 pandemic.
  2. IT Return filers almost doubled to 6.48 crore in 2020 from 3.31 crore in 2014

Income Tax

  1. Major Relief to Sr. Citizens: No Income Tax Returns for Sr. Citizens whose age is more than 75 years with the income of Salary and Interest.
  2. Section 80EEA (deduction is available if the loan is taken under affordable housing scheme) is extended by another year, till 31st March 2022.
  3. Ease in utilising Leave Travel Concession (LTC) scheme due to COVID19 pandemic: For the FY 2020-21, eligible employees can avail LTC of 1/3rd or Rs. 36,000 (which ever is less) for the duration of 2018-21 if the payment is made via non-cash mode between Oct 12th 2020 to Mar 31st 2021.
  4. Ease in Advance Tax payment for Dividends where the tax liability arises only after the payment of dividend. Refer Budget 2021 has quite a lot for Retail Investors
  5. Tax audit limit increased from Rs 5 crore to Rs 10 crore to reduce the burden if the revenue consists of 95% of digital transactions.
  6. Charitable Educational, Medical Trust's tax audit limit has now increased to 5 Crores for non-applicability of various compliances.
  7. Details of Capital Gains, Dividend Income, Salary, Interest, Postal RDs are now pre-populated part of Form 26AS document.
  8. Time limit to Re-Open of IT Assessments has decreased from 6 yrs to 3 years. if the concealment of income is > 50 Lakhs, the assessment can be re-opened up to 10 yrs after the approval of principal chief commissioner.
  9. Interest earned on annual PF contribution exceeding 2.5 Lacs from 1st April 2021 will be taxable. Refer How new EPF Rule affect your Taxes ?
  10. Any Taxpayer whose income is less than 50L, disputed income less than 10L can now directly interact with the Online faceless, nameless assessment and attend video interview if needed.

  11. Capital gains exemption for investment in start-ups extended till 31st March, 2022
  12. Vivad Se Vishwas Scheme has been extended till 28th February 2021 from 31st January 2021

  13. The Due Dates for Belated IT Return and Revised IT Return has been reduced by 3 months i.e., No belated, revised IT Returns are allowed after Dec 31st of the respective Assessment Year starting from FY 2020-21 (AY 2021-22) eFilings.

for NRIs

  1. NRI: Govt to notify the rules for NRIs who are claiming Foreign Tax Credit, and accrued income from foreign retirement for Ease of doing Double Tax Avoidance Agreement (DTAA)
  2. NRIs are allowed to operate OPC in India where the days of residency dropped to 120 days.
  3. Expected to see relief for NRIs whose residential status is in limbo.

GST

  1. No major changes in Income Tax or GST
  2. Removed the mandatory requirement of GST Audit (GSTR-9C) by a Professional. Now Filing GST Annual Return (GSTR-9) with a Self Certification is enough. (Before the Budget, GSTR-9C is mandatory for businesses whose turnover is more than 2 Crores.


Customs Duty

Customs Duty rationalisation to promote domestic production. Promoting domestic manufacturing and helping India get onto global value chain and export better.
  • Custom duty on gold and silver to be rationalized

  • Customs duty on finished synthetic gem stones raised to encourage domestic processing
  • 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 imports of certain kind of leathers withdrawn.
  • 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%
  • Duty on solar invertors raised from 5% to 20%, and on solar lanterns from 5% to 15% to encourage domestic production.
  • Customs duty on cotton increased from nil to 10% and on raw silk and silk yarn from 10% to 15%.
  • New procedure for administration of Rules of Origin to take effect.

  • Agriculture Infrastructure and Development Cess (AIDC) on a small number of items to fund Agri-Infra

Minimum Government & Maximum Governance

  1. Rs 3768 crores allocated to Digital Census, and to complete revamp of data collection process.

Innovation, R&D

  1. Rs 50,000 Crores To strengthen National Research Foundation .. 100 Sainik Schools to setup, another 15,000 schools to be strengthened.
  2. Rs. 1,500 crore for proposed scheme to promote digital payment transactions
  3. Higher Education Authority to oversee standards, accreditation, grants across all the major higher education institutions.

Reinvigorating Human Capital

  1. To strengthen national education policy .. 100 Sainik Schools to setup
  2. Higher Education Authority to oversee standards, accreditation, grants across all the major higher education institutions.
  3. Increased funding towards Human Capital compared to earlier budgets.
  4. Rs 3000 crore for realignment of existing National Apprenticeship Training Scheme (NATS) towards post-education apprenticeship, training of graduates and diploma holders in Engineering.

Infrastructure

  1. More than 200 projects worth more than Rs 1 Lakh crore completed under National Infrastructure Pipeline.
  2. Rs 3.05 lakh crore outlay for power sector
  3. Seven projects considered worth Rs 2,000 crore in PPP mode for sea ports
  4. Centre to provide Rs 18,000 crore for public buses
  5. Rs 3 lakh crore outlay for power sector
  6. Aims to complete 11,000 KM of national highway infrastructure during the CY
  7. Separate administration structure to promote ease of doing business. A new MCA portal to improve procedural aspects along with reducing the fees for capital increase & reforms in Company Compliance.
  8. Increased agriculture credit, targeted towards Rs 16.5 lakh crore

Tackling COVID

  1. Accommodated a total budget 2.23 lakh crore for healthcare. Considerable increase in funding.
  2. Rs 35,000 crore allocated for Covid-19 vaccine related effort.

6 Pillars on which #Budget2021 Prepared

  1. Health & well being
  2. Physical & Financial capital, Infrastructure
  3. Inclusive development for aspirational India
  4. Reinvigorating Human Capital
  5. Innovation, R&D
  6. Minimum Government & Maximum Governance

Macro View on Economy before Budget

  1. Economy is Recovering better than Other countries
  2. Income in the hands are dropping, rural areas seen huge drop in consumption. Only showing a long term issues with the Indian Economy.
  3. Challenges ahead in Agriculture, MSMEs, net-new Jobs
  4. What should be shown is a wholistic growth-oriented Budget.

New Vs Old Personal Income Tax Regime from FY 2020-21


Top three observations from the analysis were

  1. New Tax Regime is Good if you want higher take home salary
  2. Higher Deductions Higher Tax Savings with Old Tax Regime
  3. To switch to New Tax Regime, you need to work with your employer

Pictorial analysis on New Vs Old Personal Income Tax Regime

Comparison of Old Personal Income Tax Regime with New one from budget
Top three observations on Old vs New Tax Regime presented in Budget 2020

IT Help Center & Apps

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