The Union Budget was tabled on 1 February 2021. Here are some of the major highlights of this budget.

Income Tax

• Exemption from tax filing for senior citizens above 75 years of age with only pension and interest income.
• Scheme of Vivad se Vishwas extended till 28 February 2021.
• No Advance tax on dividend income until it is paid by the companies.
• Sec 44AB limit increased to 10cr from 5cr for persons whose transactions in cash does not exceed 5% of the total transactions.

Companies

• Definition of small companies has been revised by increasing their threshold for capitalization to Rs. 2 crores from the current limit of Rs 50 lakhs.
• Tax holiday for Start-Ups extended to 31st March 2022.
• No restriction on turnover and paid-up share capital for the incorporation of a one-person company. NRIs will also be allowed to incorporate OPCs in India.
• Presence in India for 120 days in a year is enough to start an OPC.

MSMEs

• Lower interest rates on loans i.e around 1 to 1.5%
• 50% subsidy on a patent application
• MAT credit can be carried up to 15 years instead of 10 years
• Reimbursement of ISO certification charges.
• Easy access to govt websites and government tenders
• Access to collateral-free loans

Banking

• Government to allot Rs. 20,000 crore for bank recapitalization of PSBs.
• Immediate access to bank deposits up to Rs 5 lakhs covered under the deposit insurance.
• Government aims to amend Insurance Act to allow higher FDI, increasing the FDI limit in insurance to 74% from 49% and allowing foreign ownership.

Compliance

• Revision in Custom duty rates on certain Goods & introduction of Customs duty policy from October 2021.
• MCA Version 3.0 is being launched which shall make E-Scrutiny, E-Adjudication, and Compliance management simpler.
• Income Tax Appellate Tribunal to become Faceless for taxpayers with a total income of up to Rs 50 lakhs and disputed income of up to Rs 10 lakhs.

Others

• LIC IPO to be out in FY 2021-22.
• Rs 44,000 crore under capital expenditure to be allocated to the Department of Economic Affairs in FY 2021-22.
• Additional deduction of Interest up to Rs 1.5 lakhs on Affordable Housing loans extended up to 31 March 2022.
• The allocation to healthcare in this budget has been increased substantially.

Also read: A realistic budget for a challenge that comes once in a century

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