Monday, Feb 1 2021 | Time 16:33 Hrs(IST)
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  • Key highlights of Union Budget of 2021-22
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ParliamentPosted at: Feb 1 2021 2:56PM


Regarding rationalization of procedures and easing of compliance, the Finance Minister proposed certain changes in the provisions relating to ADD and CVD levies. She also said that to complete customs investigation, definite time-lines are being prescribed. The Minister said that the Turant Custom Initiative rolled out in 2020 has helped in putting a check on misuse of FTAs.

The Finance Minister proposed to further simplify the Tax Administration, Litigation Management and ease the compliance of Direct Tax Administration.

She provided relief to senior citizens in filing of income tax returns, reduced time limit for income tax proceedings, announced setting up of the Dispute Resolution Committee, faceless ITAT, relaxation to NRIs, increase in exemption limit from audit and relief for dividend income. She also announced steps to attract foreign investment into infrastructure, relief to affordable housing and rental housing, tax incentives to IFSC, relief to small charitable trusts, and steps for incentivizing Start-ups in the country.

Post-pandemic, a new world order seems to be emerging and India will have a leading role therein, she said adding that in this scenario, India’s tax system has to be transparent, efficient and should promote investment and employment .



The Minister said that at the same time, it should put minimum burden on tax payers. She said that a series of reforms had been introduced by the Government for the benefit of tax payers and economy, including slashing of corporate tax rate, abolition of dividend distribution tax, and increasing of rebate for small tax payers. In 2020, the income tax return filers saw a dramatic increase to 6.48 crore from 3.31 crore in 2014.

In relief to senior citizens as the country celebrates 75th year of independence next year, the Budget seeks to reduce compliance burden on senior citizens who are of 75 years of age and above and have only pension and interest income. Such senior citizens will be exempted from filing their income tax return.

The Finance Minister proposed to extend the eligibility period for claim of additional deduction for interest of Rs. 1.5 lakh on loan taken for purchase of an affordable house to March 31, 2022. In order to increase the supply of affordable houses, she also announced extension of eligibility period for claiming tax holiday for affordable housing projects by one more year to March 31, 2022. For promoting supply of affordable rental housing for the migrant workers, the Minister announced a new tax exemption for the notified affordable rental housing projects.

In order to incentivize start ups in the country, she announced extension in the eligibility for claiming tax holiday for startups by one more year. In order to incentivize funding of start ups, she proposed extending the Capital Gains exemption for investment in start ups also by one more year till March 31, 2022.

In another relief and in order to reduce compliance burden, she announced reduction in the time-limit for reopening of income tax proceedings to three years from the present six years. In serious tax evasion cases, where there is evidence of concealment of income of Rs. 50 lakh or more in a year, the assessment can be reopened upto 10 years but only after the approval of the Principal Chief Commissioner.

Stating the resolve of the Government to reduce litigation in the taxation system, the Finance Minister said that the Direct Tax ‘Vivad se Vishwas’ Scheme announced by the Government has been received well. Until January 30, 2021, over 1.10 lakh have opted to settle tax dispute of over Rs. 85,000 crores under the scheme.



To further reduce litigation of small tax payers, the Finance Minister proposed to constitute a Dispute Resolution Committee. Anyone with a taxable income upto Rs. 50 lakh and disputed income upto Rs. 10 lakh, shall be eligible to approach the Committee which will be faceless to ensure efficiency, transparency and accountability. She also announced setting up of National Faceless Income Tax Appellate Tribunal Centre.

To incentivize digital transactions and to reduce the compliance burden of the person who is carrying almost all of their transactions digitally, the Budget proposes to increase the limit for tax audit for persons who are undertaking 95 per cent of their transaction digitally from Rs. 5 Crore to Rs. 10 Crore.

To attract foreign investment into infrastructure sector, the Budget proposes to relax certain conditions relating to prohibition on private funding, restriction on commercial activities and direct investment in infrastructure.
UNI VT
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