The Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman presented the Union Budget 2021-22 in Parliament on 1st February 2021. Just within an hour of the commencement of budget stock market shown positive result. It seems there must be something good for a common man, let’s see what new in this budget.
1. Divestment Plans with IPO of LIC
As per the today’s budget, the government is thinking to privatize 2 Public Sector Banks and one General Insurance Company in Financial Year 2021-22. They will be bringing the long-awaited LIC IPO in Financial Year 2022, followed by the plans to complete the divestment of BPCL, CONCOR and SCI in 2021-22
2. A Bank for roads
The Government is set to introduce a Development Financial Institution (DFI), in which Rs 20,000 crore will be provided to capitalize the same, with an aim to have a portfolio to lend Rs 5 lakh crore in 3 years. National Monetization Pipeline for brownfield projects will be launched soon; it was announced with NHAI and PGCIL having sponsored. She also added that vehicles will have to undergo fitness tests after 20 years Ventures, 15 years for CVs, announcing a volunteer.
3. Fiscal deficit
FM pegged Financial Year 2021 fiscal deficit at 9.5% of GDP, with Financial Year 2022 target of fiscal deficit at 6.8% of GDP. They’re trying to get to back to fiscal consolidation path by Financial Year 2026. It’s expected that Fiscal deficit will reach below 4.5% by financial year 2026. Financial year 2022’s gross expenditure is seen as Rs 34.83 lakh crore.
4. Capital expenditure
Financial Year 2022 capital expenditure provided is up to 34.5% at Rs 5.54 lakh crore, said the Finance Minister. Rs 44,000 crore under capital expenditure will be given to Department of Economic Affairs in Financial Year 2022, she added. Financial Year 2021 capital expenditure is expected to be at Rs 4.39 lakh crore.
5. No amendment in tax
There is no change in direct taxes, but measures has been taken in direct tax incentives to ease compliance for taxpayers. The FM has proposed making advance tax liability on dividend income, which shall arise only after payment of dividend. It has also looked at pre-filled tax forms with respect to details like salary income, tax payment and TDS.
6. Relief for seniors, small taxpayers
Senior citizens above 75 with only pension, interest income won’t have to file ITRs anymore. A dispute resolution committee for small taxpayers is being planned. Anyone with taxable income of up to Rs 50 lakh and disputed income of up to Rs10 lakh will be eligible to approach the dispute resolution committee.
7. Fuel and Liquor CESS
For development of the country, Agri Infrastructure and Development CESS on a number of items including fuel and liquor will be introduced soon.
Read Also: Union Budget :Summary of the budget 2021-22
8. Relief for seniors, small taxpayers
No tax filing for seniors above 75 with only pension, interest income. A dispute resolution committee for small taxpayers is being planned. Anyone with taxable income of up to Rs 50 lakh, disputed income of up to Rs 10 lakh eligible to approach dispute resolution committee.
9. Fuel and Liquor CESS
Agri Infrastructure and Development CESS on a number of items including fuel and liquor was announced today.
10. Textile parks
seven textile parks will be set over three years under the scheme of mega investment in textile parks which was announced in current budget. The parks to be setup over 1,000 acres of land with world-class infrastructure, and plug-and-play facilities, will be in addition to the Rs10,683-crore production linked incentive (PLI) scheme for technical textiles and man-made fibers.
11. Monetization of land
The Budget 2021 gave a push to disinvestment and asset monetization as the government strives for capital creation. “Monetizing of land will be taken up.
12. Big borrowing
FM said government will borrow Rs 80,000 crore in the remaining two months to meet FY21 expenditure, and is projected to borrow about Rs 12 lakh crore in FY22.
13. Dividend
Dividend payment to REIT/ InvIT exempt from 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.
The author of the above article is Sneha Bhalotia.
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