The Union Finance Minister, Nirmala Sitharaman on February 01, 2021 (Monday), presented the Budget 2021-22 which aims to bolster an economy badly-hit by the novel coronavirus pandemic resting on six pillars, namely, health and well-being, physical, financial capital and infrastructure inclusive development for aspirational India, reinvigorating human capital, innovation and R&D and minimum government and maximum governance.
Following are the highlights of the 2021 Budget:
- The capital expenditure for FY-2021-22 is Rs. 5.54 lakh crore.
- Fiscal deficit stands at 9.5% of GDP which is estimated to be 6.8% in the current Financial Year.
- State borrowings have been increased up-to 4% of Gross State Domestic Product (GDSP).
- The FDI limit in the insurance sector has been increased from 49% to 74% under the automatic route.
- The budget has proposed and outlay of Rs. 3, 05,984 Crore over five years for a of revamped reforms- based result linked power distribution sector scheme. Further, it is proposed to put in place a framework giving consumers an alternative to choose among more than one distribution companies.
- The government has proposed to sell stake of at least 2 public sector banks as a part of its privatization plan. Further, the government expects to raise Rs. 1 lakh crore from dis-investment in public sector banks and financial institutions.
- Startups will get capital gains exemption by 1 year to 31st March 2022. Further, startups also have 1 more year to claim tax holidays.
- Budget for MSMEs has been doubled from the previous year to Rs.15, 700 crore.
- Budget for Education sector of Rs. 99,300 Crore has been allocated and further steps will be taken to attract external commercial borrowings and FDI in the same.
- There has been no change in the Income Tax Slabs, Income Tax exemptions and Covid cess. Further, the limit for re-opening window for IT assessment cases is reduced from 6 years to 3 years.However, in the cases of serious tax evasion cases, i.e., Rs. 50 lakh or more, it can go up-to 10 years.
- Affordable housing projects are proposed to get a tax holiday for a period of 1 year.
- Dividend Income has now been made taxable in the hands of recipient. Earlier, the companies were paying a tax of 15% on dividends distributed by it to shareholders.
- Compliance burden on senior citizens is now reduced as citizens of 75 years and above are proposed to not file Income Tax Return (ITR) on pension income and interest income.
- Budget of Rs. 2,23,846 Crore has been allocated to the Health care sector which ups 137% compared to Rs. 94,452 Crore in previous year.
- Vehicle scrapping policy has been announced to phase out old and unfit vehicles. Further, all vehicles have to undergo a fitness test in automated fitness centres every 20 years in case of personal vehicles, and every 15 years in case of commercial vehicles.