- Tax rates, both corporate and individual, remain unchanged. However, there is a relief to Senior Citizens aged 75 year and above, who get pension and earn interest from deposits will not be required to file an income tax.
- The reopening window for IT assessment –
-The time limit has been reduced to 3 years from 6 years in normal cases
-However, in case of serious tax fraud only where concealment of income of 50 lakh or more in a year, the assessment may be reopened in 10 years.
- A Dispute Resolution Committee is set up for the resolution of disputes of assessees with a taxable income up to ₹ 50 lakh and disputed income up to Rs. 10 lakh.
- Proposed Faceless Income Tax Appellate Tribunal (ITAT) for providing online resolution.
- Small Business turnover threshold for audit is increased from Rs 5 cr to Rs 10 cr.
This will reduce the compliance burden on small retailers, traders & shopkeepers.
However, this applies only to those businesses who carry 95% of business transactions digitally. - Agriculture infrastructure and development cess proposed on certain items including urea, apples, crude soya bean and sunflower oil, crude palm oil, Kabuli chana, and peas.
- An agriculture Infrastructure and Development Cess of ₹ 2.5 per liter has been imposed on petrol and ₹ 4 per liter on diesel.
- An increase in import duties for certain products and rationalization of duties in the case of many items manufactured by MSMEs will help local industries compete against imports and boost their revenues. Custom duties increased to restrict low-quality imports:
– Duty of copper scrap reduced to 2.5%
– Customs duty on gold and silver to be rationalized .
– Duty on naphtha reduced to 2.5%.
– Duty on solar inverters raised from 5% to 20%, and on solar lanterns from 5% to 15%
– All nylon products charged with 5% customs duty
– Tunnel boring machines to attract customs duty of 7%
– Customs duty on cotton raised from 0 to 10%
– The Finance Minister proposed to withdraw exemption on import of leather as they are domestically produced.
– The ‘Turant Customs’ has to be initiated for faceless, paperless, and contactless customs measures.
- The definition of small companies is modified: Companies with a paid-up capital below 2cr. & a turnover not exceeding 20cr. are to be considered as small companies. Over 3 lakh+ companies benefit from this provision.
- For Startups and Innovators, the OPC can be incorporated without a limit for turnover or paid-up capital. This also allows NRIs to incorporate OPC in India.
- Rs 15,700 crores allocated to the MSME sector, besides laying a special framework of Data Analytics, Machine Learning (ML), and Artificial Intelligence (AI) to assist the sector.
- Sitharaman earmarked Rs 1,500 crore for a proposed scheme to provide financial incentives for MSMEs to promote digital modes of payment among MSMEs to boost digital transactions.
- The Budget also gives a helping hand to small producers through boosting cotton and silk raw material producers as well as fabric manufacturers.
- The IPO of the LIC will be carried out in FY 2021-22. Also, for the disinvestment strategy, two PSUs and 1 insurance company will be considered.
Stay tuned.
Gaurav Bohra.
