Union finance minister Nirmala Sitharaman on Monday presented the Union Budget 2021 with a focus on 6 pillars to energize the economy which has been battered by the Covid-19 pandemic.
The six pillars are Health and Well-Being, Physical and Financial capital and infrastructure, Inclusive Development for Aspirational India, Reinvigorating Human Capital, Innovation and R&D, Minimum Government, and Maximum Governance.
Presenting India’s first digital budget, Finance Minister Nirmala Sitharaman said the preparations for the annual exercise culminated in an environment like never before.
Here are the top takeaways from the Union Budget 2021-2022.
- PM Aatmanirbhar Swasth Bharat Yojana to be launched, an outlay of Rs 64,180 crore over six years. Sitharaman said the scheme will develop capacities of primary, secondary, and tertiary care health systems, and strengthen existing national institutions.
- Relief for senior citizens but no change in income tax slabs: Senior citizens above 75 years with only pension and interest income have been exempted from filing tax returns. The paying bank will deduct the necessary tax from their income. However, there has been no change in the personal income tax slabs. Also, pre-filled income tax returns with details on capital gains from listed securities, dividend income, and interest income from banks and post offices would be available soon. The tax department will notify rules to remove hardships of double taxation faced by non-resident Indians (NRIs).
- Time limit for the reopening of I-T assessment halved to 3 years: The government has reduced the time limit for reopening of income tax assessment cases to three years from the present six years. However, for serious tax fraud cases where concealment of income is Rs 50 lakh or more the time limit would be 10 years. For small taxpayers with taxable income up to Rs 50 lakh, a dispute resolution committee would be set up.
- Boost to affordable housing: The government has given a boost to the housing sector and home-buyers. Additional deduction of interest amounting to Rs 1.5 lakh for a loan taken to purchase an affordable house has been extended by one more year to 31st March 2022. Affordable housing projects can avail a tax holiday for one more year till 31st March 2022.
- A voluntary vehicle scrappage policy, where passenger vehicles will undergo fitness tests after 20 years, and commercial vehicles after 15 years. The move will bring relief to the automotive sector.
- FDI cap in insurance sector increased to 74%: The government has proposed to increase the foreign direct investment (FDI) limit in the insurance sector to 74 percent from the present 49%. The move is aimed at attracting greater overseas capital inflows to help enhance insurance penetration in the country. Under the new structure, the majority of directors on the board and key management persons would be resident Indians, with at least 50 percent of directors being independent directors, and a specified percentage of profits being retained as a general reserve.
- 8,500 km of highway projects to be awarded in FY22 focus on poll-bound states: Finance minister Nirmala Sitharaman said projects for building 8,500 km of highways will be awarded by March 2022. The bulk of these projects will be in the four poll-bound states. Poll-bound West Bengal will see highway projects worth Rs 25,000 crore. Highway projects worth Rs 65,000 crore will be undertaken in Kerala and Rs 3,400 crore will be allocated for road projects in Assam. Sitharaman also announced an Rs 18,000-crore scheme to augment public transport in urban areas.
- Announcement of Bad bank and Rs 20,000 crore recapitalization for PSBs: The government announced the setting up of an Asset reconstruction and management company for stressed assets of banks. It also announced an infusion of Rs 20,000 crore into public sector banks (PSBs) in 2021-22 to further consolidate the financial health of banks.
- Foreign direct investment (FDI) limit in insurance companies will be raised to 74 percent from 49 percent.
- For 2021-22, the disinvestment target has been set at Rs 1.75 lakh crore. This includes the Centre reducing its stake in two state-owned banks and a general insurance company, and large-scale asset sales. It will also include the listing of Life Insurance Corporation of India (LIC) and proposed privatization of major state-run companies such as Air India and Bharat Petroleum Corporation (BPCL).
- Customs duty on some parts of mobile phones has been raised to 2.5 percent from nil.