Budget 20-21- Important Takeaways

[CS Swati Dodhi]

Key Highlights from the Union Budget 2021

Direct Taxes

• Vivad Se Viswas Scheme Last Date of filing extended to 28th February, 2021.

• Citizens of age 75 years and above who have only Pension and Interest income – Need not file Income Tax Returns

• Re-opening of Assessment to reduced to 3 years from 6 years. Only where evidence of concealment of Income of ₹ 50 lakhs or more – re-opening can be made upto 10 years & only with approval of Pr.CCIT.

• Reducing Litigation for small tax payers – Constitution of Faceless Dispute Resolution Panel for people with Total Income upto ₹ 50 lakh and disputed income of ₹ 10 lakh

• Income Tax Appellate Tribunal to become Faceless – Only electronic communication will be done

• Relaxation to NRIs – Rules to remove hardship of Double Taxation

• Tax Audit Limit to be increased to ₹ 10 crores from ₹ 5 crores for those having less than 5% cash transactions

• Dividend Tax - Dividend will be exempt from TDS. Advance tax liability on dividend income will arise only after declaration or payment of dividend. For Foreign Investors – lower treaty rate benefit will be given.

• Affordable Housing – Additional Interest deduction (Sec 80EEA) of ₹ 1.5 lakhs to be extended for loans taken till 31st March, 2022.

• Affordable Housing Projects – Tax Holiday extended till 31st March, 2022.

• Tax Holiday for Capital Gains for Aircraft Leasing Companies and Tax Exemption to Lease paid to Foreign Persons

• Pre-Filling of Returns – Details of Capital Gains, Dividend Income and Interest income will be pre-filled in the returns

• Benefit to Trusts – Charitable trusts running Hospitals and Educational Institutions and Medical trusts get relief increased from ₹ 1 crore to ₹ 5 crore.

• Employee contribution not paid by employer will not be allowed as a deduction.

• Start-Ups tax holiday extended to 31st March, 2022. Capital Gains exemption on investment in start ups also extended to 31s March, 2022.

MCA, Companies Act, LLP Act

• Compliance requirements eradication of Small Companies – Limit increased to Share Capital upto ₹ 2 crore and Turnover upto ₹ 20 crore will be Small Companies. 

• One Person Companies (OPC) to grow without any restriction in Share Capital or Turnover. NRIs will be allowed to set-up OPCs. Presence in India of 120 days in a year enough to start an OPC.

• Decriminalisation of LLP Act, 2008.

• Tribunals to be rationalised. 

• Intoducing MCA Version 3.0 – E-Scrutiny, E-Adjudication and Compliance management simplification.