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| Senior Citizens above 75 years of Age, Having Pension & Interest Income exempted from Filing Tax Return |
NEW DELHI (LisbonTimes):- The Union Budget
2021-22 presented in Parliament today by the Union Minister for Finance and
Corporate Affairs Smt. Nirmala Sitharaman seeks to further simplify the Tax
Administration, Litigation Management and ease the compliance of Direct Tax
Administration.
In the Budget Speech,
the Finance Minister provided relief to senior citizens in the filing of income tax
returns, the reduced time limit for income tax proceedings, announced setting up of
the Dispute Resolution Committee, faceless ITAT, relaxation to NRIs, increase
in exemption limit from audit and relief for dividend income. She also
announced steps to attract foreign investment into infrastructure, relief to
affordable housing and rental housing, tax incentives to IFSC, relief to small
charitable trusts, and steps for incentivizing Start-ups in the country.
Smt.Nirmala
Sitharaman, in her Budget speech, said that post-pandemic, a new world order
seems to be emerging and India will have a leading role therein. She said
in this scenario, our tax system has to be transparent, efficient and should
promote investment and employment in the country. The Minister said that
at the same time, it should put a minimum burden on our taxpayers. She
said that a series of reforms had been introduced by the Government for the
benefit of taxpayers and economy, including slashing of a corporate tax rate, the abolition of dividend distribution tax, and increasing of rebate for small taxpayers. In the year 2020, the income tax return filers saw a dramatic
increase to 6.48 crore from 3.31 crore in 2014.
RELIEF
TO SENIOR CITIZENS
In the 75th year
of independence, the Budget seeks to reduce compliance burden on senior
citizens who are of 75 years of age and above. Such senior citizens
having only pension and interest income will be exempted from filing their
income tax return. The paying Bank will deduct the necessary tax on their
income.
RELAXATION TO NRIs, RELIEF FOR DIVIDEND
The Budget proposes to notify rules for removing
the hardship of Non-Resident Indians returning to India, on the issue of their
accrued incomes in their foreign retirement account. It proposes to make a dividend payment to REIT/InvIT exempt from TDS. For Foreign Portfolio
Investors, the Budget proposes deduction of tax on dividend income at lower
treaty rate. The Budget provides that advanced tax liability on dividend
income shall arise only after the declaration or payment of dividend. The
Minister said that this was being done as the amount of dividend income cannot
be estimated correctly by the shareholders for paying advance tax.
AFFORDABLE HOUSING/ RENTAL HOUSING
The Finance Minister proposed to extend the eligibility
period for a claim of the additional deduction for the interest of Rs. 1.5 lakh on loan
taken for the purchase of an affordable house to 31st March,
2022. In order to increase the supply of affordable houses, she also
announced an extension of the eligibility period for claiming tax holiday for
affordable housing projects by one more year to 31st March,
2022. For promoting the supply of affordable rental housing for the migrant
workers, the Minister announced a new tax exemption for the notified affordable
rental housing projects.
TAX BENEFITS FOR STARTUPS
In order to incentivize startups in the country, Smt.
Sitharaman announced an extension in the eligibility for claiming tax holiday for
startups by one more year till 31st March,
2022. In order to incentivize funding of startups, she proposed
extending the Capital Gains exemption for investment in startups by one more
year till 31st March,
2022.
TIMELY DEPOSIT OF EMPLOYEES’ CONTRIBUTION TO LABOUR
WELFARE FUNDS
The Finance Minister said that delay in deposit of the
contribution of employees towards various welfare funds results in permanent
loss of interest/income for the employees. In order to ensure timely
deposit of employee’s contribution to these funds by the employers, she
announced that late deposit of employee’s contribution shall never be allowed
as a deduction to the employer.
REDUCTION IN TIME FOR REOPENING INCOME TAX PROCEEDINGS
In order to reduce compliance burden, the Budget provides a reduction in the time-limit for reopening of income tax proceedings to three
years from the present six years. In serious tax evasion cases, where
there is evidence of concealment of income of Rs. 50 lakh or more in a year,
the assessment can be reopened up to 10 years but only after the approval of the
Principal Chief Commissioner.
DISPUTE RESOLUTION COMMITTEE & NATIONAL FACELESS
INCOME TAX APPELLATE TRIBUNAL CENTRE
Stating the resolve of the Government to reduce
litigation in the taxation system, the Finance Minister said that the Direct
Tax ‘Vivid se Vishwas’ Scheme announced by the Government has been received
well. Until 30th January,
2021, over one lakh ten thousand taxpayers have opted to settle tax dispute of
over Rs. 85 thousand crores under the Scheme. To further reduce
litigation of small taxpayers, Smt. Sitharaman proposed to constitute a
Dispute Resolution Committee. Anyone with a taxable income up to Rs. 50
lakh and disputed income up to Rs. 10 lakh, shall be eligible to approach the A committee which will be faceless to ensure efficiency, transparency and
accountability. She also announced setting up of National Faceless Income
Tax Appellate Tribunal Centre.
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TAX AUDIT LIMIT HIKED FOR DIGITAL TRANSACTIONS
To incentivize digital transactions and to reduce the
compliance burden of the person who is carrying almost all of their
transactions digitally, the Budget proposes to increase the limit for tax audit
for persons who are undertaking 95 per cent of their transaction digitally from
Rs. 5 Crore to Rs. 10 Crore.
INCENTIVES FOR FOREIGN INVESTMENTS
To attract foreign investment into the infrastructure sector,
the Budget proposes to relax certain conditions relating to prohibition on
private funding, restriction on commercial activities and direct investment in
infrastructure. In order to allow funding of infrastructure by the issue of
zero-coupon bonds, the Budget proposes to make notified infrastructure debt
funds eligible to raise funds by issuing tax-efficient zero-coupon bonds.
TAX INCENTIVE TO IFSC
In order to promote International Financial Services
Centre (IFSC) in GIFT City, the Budget proposes more tax incentives which
include tax holiday for Capital gains from incomes of aircraft leasing companies,
tax exemption for aircraft lease rentals paid to foreign lessors, tax
incentives for relocating foreign funds in the IFSC and to allow tax exemption
to the investment division of foreign banks located in IFSC.
RELIEF TO SMALL TRUSTS
In order to reduce the compliance burden on the small
charitable trusts running educational institutions and hospitals, the Budget
proposes to increase the limit on annual receipts for these trusts from present
Rs.1 Crore to Rs. 5 Crore for non-applicability of various compliances.
FACELESS ITAT
Smt. Nirmala Sitharaman further proposed to Make Income
Tax Appellate Tribunal faceless. She proposed a National Faceless Income
Appellate Tribunal Centre, wherein all communication between the Tribunal and
the appellant shall be electronic.
PRE-FILLING OF RETURNS
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