Budget 2021 Simplified: What Does It Have For The Common Man | Major Takeaways

New Delhi: As Finance Minister Nirmala Sitharaman presented her “budget like no other” on Monday, the PM Modi-led government made its intentions clear on how it plans to revive the economy from a pandemic-induced slump.

However, there are a lot of questions on the minds of common folk as to what does the Budget 2021 mean for you and I?

Is there any tax relief for the middle class? How does the government plan to address the issue of millions of jobs lost during the lockdown? Will there be increased spending on public health amid the pandemic? What about the agriculture sector, and the lakhs of farmers who have been protesting the Centre’s agri laws since two months?

Let us take a look at the major takeaways for common man from FM’s Budget 2021:

No Tax Relief

Finance Minister had last year revealed a new tax regime (which will run parallel to the existing rates and comes into effect from AY 2021-22). There were no changes to the tax slabs this year. However, there was some good news for pensioners over 75 – they do not need to file their income tax returns if their income consists only of pensions and interest.

Cess On Petrol, Diesel

An agriculture infrastructure and development cess of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel have been added. However, Sitharaman said other duties on both fuels had been adjusted “so that overall consumer does not bear any additional burden”. While the assurance is welcome, it doesn’t do anything about skyrocketing petrol and diesel prices.

Employment

The biggest issue at hand was the massive number of jobs lost because of the pandemic. According to the budget, more than 1.4 lakh jobs will be created by March 2021 in various central government departments. However, this figure includes jobs created from March 2019, nine months even before the COVID-19 came into existence.

Extension Of Date For Home Loan Deduction

You can now claim – up to March 31, 2022 – additional deduction of Rs 1.5 lakh (over existing deduction of Rs 2 lakh) in relation to interest on loans to buy a house. This deadline was earlier set at March 31, 2021. There are some conditions to this, including that the loan must have been taken between April 1, 2021 and March 31, 2022.

Interest on PF Contributions Over a Limit

Individuals whose provident fund contribution is Rs 2.5 lakh or more in a financial year, cannot seek tax exemption on interest earned from the next financial year. At present, interest earned on PF is exempted from income tax.

Immediately Available Deposit Insurance –

Last year two banks – Yes Bank and the Punjab and Maharashtra Co-operative Bank – made headlines after the RBI placed withdrawal limits over financial irregularities. This inconvenienced tens of thousands of people. In Budget 2021 it was announced that in such a situation depositors can now get immediate access to deposit insurance up to Rs 5 lakh. Earlier, it could take months for this money to be released.

Reduced Import Duty on Gold, Silver

The budget cut import duties on gold and silver – from 12.5 per cent to 7.5 per cent, but imposed a 2.5 per cent cess (a separate tax) on the imports. This should make the precious metals cheaper for retail buyers and boost jewellery exports.

Metro in Tier-II Cities

In order to make life easier for urban commuters, new technologies will be deployed to provide metro rail systems in tier-II cities and peripheral areas of tier-I cities. In addition, central funding will be provided to metro systems in Kochi, Chennai, Bengaluru, Nagpur and Nashik. Also, a new scheme will be launched – at a cost of Rs 18,000 crore – to support the expansion of public bus transport services.

Health Spending

Though this may not directly affect you, increased public health expenditure is essentially a good thing, especially during a pandemic. Expenditure on health sectorhas been increased by 137 per cent – from Rs 94,452 crore last year to an estimated Rs 2.24 lakh crore this year. This includes Rs 35,000 crore for COVID-19 vaccines and Rs 64,180 crore (over six years) for improving healthcare.

FDI in Insurance

The budget also allowed increased FDI in insurance, hiking the upper limit to 74 per cent. This should improve the number and quality of schemes available for the public. The centre will also, the budget said, introduce an IPO for the Life Insurance Corporation in 2022, which is expected to raise funds for the government and allow the public to invest in LIC.