Highlights of Union Budget 2021-22
Table of Contents
Highlights of Union Budget 2021-22
A. Initiative TakenTill Date
The Finance Minister started her tax proposals by stressing the initiative taken in the past to smoothen and simplify the tax system. Few of them are slashing of Corporate Tax Rates drastically, Abolition of DDT & Increase in Rebate for Individuals. She emphasizes that these measures result in a dramatic increase in No. of ITRs to 6.48 crore from 3.31 crore in 2014.
In the Direct Tax administration, she reminded recently introduced the Faceless Assessment and Faceless Appeal and also ensure to take further steps to simplify the tax administration, ease compliance, and reduce litigation Accordingly on the same line now it is proposed to make the Income Tax Appellate Tribunal proceeding faceless. In case any personal hearing is required that will be through video conferencing.
B. Direct Tax Proposals
1 Relief to Senior Citizen:
To reduce the compliance burden for Senior Citizen of the age of 75 years or more, it is proposed to done away with the filing of ITR for them if they have only interest and pension income. Further paying bank will deduct TDS on their income.
2 Big Relief – Reopening of Assessment Period Reduced Constitution of Dispute Resolution Committee
Presently assessment can be reopened under the Income Tax up to 6 Years in normal cases & 10 Years for serious cases i.e. cases where search operations reveal undisclosed income and assets of over Rs 50 lakh.
It is now proposed to divide the reassessment cases into Normal cases and Specific cases as follows:
i) in normal cases, no notice shall be issued if 3 years have elapsed from the end of the relevant assessment year.
ii) in specific cases where the Assessing Officer has in his possession evidence which reveals that the income escaping assessment, represented in the form of asset, amounts to or is likely to amount to Rs. 50 lakh or more, notice can be issued beyond the period of 3 years but not beyond the period of 10 years from the end of the relevant assessment year;
3 Constitution of Dispute Resolution Committee
Earlier Vivad se Vishwas Scheme was announced to reduce the litigation. 1.1L taxpayers have already opted to settle tax disputes of over `85,000 crores of disputes under this Scheme. Now further to reduce litigation, the Dispute Resolution Committee shall be constituted to resolve small disputes for assesses having Taxable income up to 50L and Disputed income up to 10L.
4 Proposals for International Tax/NRI/ Foreign Tax Credit
To make the process of giving the benefit of foreign tax credit smoother detailed rules will be Notified.
5 Tax Audit Limit Further Increased to 10CR
Tax Audit Limit to be increased to Rs.10 crores from Rs.5 crores for those having less than 5% cash transactions.
6 Dividend Tax Relief
Last year DDT was Abolished and dividends made taxable in the hands of Taxpayers. Therefore, to reduce the compliance burden on individual recipients of dividends now it is proposed that Dividends will be exempt from TDS. Advance tax liability on dividend income will arise only after the declaration or payment of the dividend. Moreover, for Foreign Investors – a lower treaty rate benefit will be given.
7 Benefits for Affordable Housing
Additional Interest deduction (Sec 80EEA) of Rs.1.5 lakhs to be extended for loans taken till 31st March 2022 for Affordable Housing.
Tax Holiday extended for 1 more year i.e. till 31st March 2022 for Affordable Housing Projects.
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