Tax Holiday For Startups, Relief For Senior Citizens: Top 10 Tax Highlights Of Budget 2021

While presenting Budget 2021 in the Lok Sabha on February 1, Finance Minister Nirmala Sitharaman announced no new changes to corporate or personal income-tax rates. Last year, a major cut in the tax rates for the salaried class was announced, which, Ms Sitharaman said, was to simplify the tax regime in the country. In order to ease the compliance burden on senior citizen pensioners aged 75 years or above, the government exempted them from filing income tax if the full amount of tax payable has been deducted by the paying bank. The exemption is available to those senior citizens who have only interest income apart from the pension income. The government extended the eligibility period for claim of the additional deduction for the interest of Rs 1.5 lakh paid for loan taken for purchase of an affordable house to March 31, 2022. The government also extended the eligibility period for claiming tax holiday for affordable housing project by one more year to March 31, 2022. In order to incentivise the establishment of more startups in the country, the Finance Minister extended the tax holiday to startups incorporated up to March 31, 2022. The capital gains exemption on investment in startups was extended to March 31, 2022 The government proposed to restrict tax exemption for the interest income earned on the employees' contribution to various provident funds to the annual contribution of Rs 2.5 lakh. The restriction will be applicable only for the contribution made on or after April 1, 2021 The government proposed to levy tax deduction at source (TDS) of 0.1 per cent on a purchase transaction exceeding Rs 50 lakh in a year. In order to reduce the compliance burden, the responsibility of deduction will lie only on the persons whose turnover exceeds Rs 10 crore. In order to rationalise taxation of Unit Linked Insurance Plan, the government proposed to allow tax exemption for the maturity proceed of the ULIP having annual premium up to Rs 2.5 lakh. The cap of Rs 2.5 lakh on the annual premium of ULIP shall be applicable only for the policies taken on or after February 1, 2021 The government introduced the setting up of a national faceless Income-tax appellate tribunal centre where all the communication between the tribunal and the appellant will be made electronically. Wherever personal hearing is needed, it will be done through video-conferencing In a bid to incentivise digital transactions and to reduce the compliance burden of individuals carrying almost all of their transactions digitally, the government proposed to increase the limit for tax audit for persons who are undertaking 95 per cent of their transactions digitally from Rs 5 crore to Rs 10 crore. The dividend paid to real estate infrastructure trusts or infrastructure investment trusts will be exempted from TDS, according to Budget 2021. The deduction of tax on incomes including dividend income of foreign portfolio investors may be made at treaty rate. The government also exempted dividend payment from levy of minimum alternate tax for foreign company if the applicable tax rate is less than the rate of MAT.

Tax Holiday For Startups, Relief For Senior Citizens: Top 10 Tax Highlights Of Budget 2021

NDTV Profit

NDTV Profit

Follow Us

DISCOVER US FASTER

DOWNLOAD THE APP