Union Budget is a spending plan based on income expenses of the country as a whole.
Finance Minister today presented union budget 2021. The budget gave major emphasis to healthcare and infra sectors. Besides, a host of substantial announcements were made on the divestment front, including the coming IPO of Life Insurance Corporation and here are the highlights of the same from the Perspective of Finance & Tax by Team Jorden & Sky.
Seniors above 75 with only Pension and Interest income are not mandated to file Income Tax Return.
A dispute resolution committee for small taxpayers is being planned. Taxpayer with taxable income of up to Rs.50 lakh, disputed income of up to Rs.10 lakh can approach dispute resolution committee to speedy resolution of case.
The 'tax audit limit' under Section 44AB has been increased to Rs.10crores from earlier limit of Rs.5 crores where min 95% of business transactions are done in digital mode. However, if less than 95% business transaction are done in mode other than digital, then tax audit limit is Rs.1 Cr.
The Budget proposes setting up faceless dispute resolution committee for individual taxpayers, making Income Tax Appellate Tribunal faceless, and constituting the dispute resolution committee for small taxpayers for ease of settling up disputes.
Interest earned on employees PF contribution amounting to Rs.2.5 lacs& more will be now be taxed under normal tax slab rates (earlier it was exempt). It will hit high-income salaried people who use the Voluntary Provident Fund to earn tax-free interest.
The FM proposed to set aside Rs.15,70 0 crore for medium and small enterprises in FY22.
An exciting update for One Person Company. For startups &innovators, OPC without limit for turnover or paid-up capital and also allowing NRIs to incorporate OPC in India.
Startups were given importance in this budget as well. The tax-exempt on the revenue, as well as investments, have been increased by one more year which will be beneficial for the startup growth in the country.
Extension of additional interest deduction of INR 1.5 lacs for small tax payers to purchase affordable housing by one more year under Section 80EEA
Budget 2021 proposes to make it easier for taxpayers to calculate and pay advance tax on dividend income. This will help taxpayers avoid paying interest on late payment of advance tax on dividend income which would otherwise happen because of difficulty in estimating correct dividend income.
In case the PF amount is deducted but not deposited by the employer within the due date specified then it will not be allowed as a deduction for the employer.
Timeline for re-opening of Assessment is reduced to 3 years from existing6 years. Only where evidence of concealment of Income of Rs. 50 lakhs or more –re-opening can be made up to 10 years & only with approval.
We will share detailed note on each aspect of the Budget after analyzing the provision of the Bill. Overall, it looks very promising Budget for Startups and MSME with ease of compliances and extension of tax incentives.