Direct tax proposal in Budget 2021-22 In india

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Budget seeks to further simplify tax administration, Litigation Management and ease compliance of Direct tax administration.

  • Relief to Senior Citizens: Exemption from filing tax returns for senior citizens over 75 years of age and having only pension and interest income.
  • Reducing Disputes, Simplifying Settlement
    • Time limit for re-opening cases reduced to 3 years from 6 years.
    • Serious tax evasion cases, with evidence of concealment of income of Rs. 50 lakh or more in a year, to be re-opened only up to 10 years, with approval of the Principal Chief Commissioner.
    • Setting up the Dispute Resolution Committee for taxpayers with taxable income up to Rs. 50 lakh and disputed income up to Rs. 10 lakhs.
    • National Faceless Income Tax Appellate Tribunal Centre to be established.
    • Over 1 lakh taxpayers opted to settle tax disputes of over Rs. 85,000 crores through Vivad Se Vishwas Scheme until 30th January 2021.
  • Relaxation to NRIs: Rules to be notified for removing hardships faced by NRIs regarding their foreign retirement accounts and also of double taxation.
  • Incentivising Digital Economy: Limit of turnover for tax audit increased to Rs. 10 crores from Rs. 5 crores for entities carrying out 95% transactions digitally.
  • Relief for Dividend:
    • Dividend payment to REIT/ InvIT exempt from Tax Deducted at Source (TDS).
    • Advance tax liability on dividend income only after declaration/ payment of dividend.
    • Deduction of tax on dividend income at lower treaty rate for Foreign Portfolio Investors.
  • Attracting Foreign Investment for Infrastructure:
    • Infrastructure Debt Funds made eligible to raise funds by issuing Zero Coupon Bonds.
    • Relaxation of some conditions relating to prohibition on private funding, restriction on commercial activities, and direct investment in infrastructure.
  • Supporting ‘Housing for All’:
    • Additional deduction of interest, up to Rs. 1.5 lakh, for loan taken to buy an affordable house extended for loans taken till March 2022.
    • Tax holiday for Affordable Housing projects extended till March 2022.
    • Tax exemption allowed for notified Affordable Rental Housing Projects.
  • Tax incentives to IFSC in GIFT City:
    • Tax holiday for capital gains from incomes of aircraft leasing companies.
    • Tax exemptions for aircraft lease rentals paid to foreign lessors.
    • Tax incentive for relocating foreign funds in the IFSC.
    • Tax exemption to investment division of foreign banks located in IFSC.
  • Ease of Filing Taxes: Details of capital gains from listed securities, dividend income, interest from banks, etc. to be pre-filled in returns.
  • Relief to Small Trusts: Exemption limit of annual receipt revised from ₹1 crore to ₹5 crore for small charitable trusts running schools and hospitals.
  • Labour Welfare: Late deposit of employee’s contribution by the employer not to be allowed as deduction to the employer.
  • Incentives for Startups
    • Eligibility for tax holiday claim for start-ups extended by one more year.
    • Capital gains exemption for investment in start-ups extended till 31st March, 2022.

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