Union Budget 2021 – Pensioners Aged Above 75 are Exempted from Filing Income Tax Returns!

Last Updated : Feb. 2, 2021, 8:33 a.m.

Finance Minister Nirmala Sitharaman has presented the Union Budget 2021 on the floors of Parliament today. It’s been an important budget considering what the economy has gone through amid the COVID-19 pandemic. The budget announced is based on six pillars –

• Health and Well-being
• Physical, Financial Capital and Infrastructure
• Inclusive Development for Aspirational India
• Reinvigorating Human Capital
• Innovation and R&D
• Minimum Government and Maximum Governance

Take a look at the announcements made by the minister across these 6 pillars.

Tax-related Announcements

• Series of direct tax reforms have been announced by the government recently
• Compliance burden needs to reduce for senior citizens
• Pensioners aged above 75 are exempted from filing income tax returns
• Reopening of tax assessments reduced to 3 years from the present 6 years
• Tax assessment process to be faceless
• Tax audit limit increased from INR 5 crore to INR 10 crore
• Advance tax liability on dividend income shall arrive only after declaration of payment of dividends
• To further ease the filing of IT returns, details of capital gains and interest from banks, post offices, etc will be pre-filled
• Tax holiday for affordable housing projects extended for another year till March 31, 2022
• Capital gain tax exemption for investment in startups extended by one year
• Propose to make dividend payments to REIT (estate investment trusts) and Invit’s (Infrastructure investment trusts) exempt from TDS
• Late deposit of employee’s contribution to PF by employers will not be allowed as a deduction to the employer
• Interest on employee contribution to provident fund above INR 2.5 lakh will be taxable
• Govt to notify rules to eliminate double taxation for NRIs on foreign retirement funds
• Customs duty on solar lanterns cut to 5%
• The government has proposed agricultural infrastructure and development cess of INR 2.5/litre on petrol and INR 4 on diesel

Other Announcements

• PM Modi announced the Pradhan Mantri Gareeb Kalyan Yojana worth INR 2.76 lakh crore for the poor and the needy during the lockdown last year
• Present economic contraction is due to the global environment
• The Aatmanirbhar packages introduced by the government were like 5 mini budgets themselves
• The total financial impact of all Aatmanirbhar Bharat packages, including the measures taken by RBI, was about INR 27.1 lakh crore, more than 13% of GDP
• The government under PM Modi focused on delivering to the most vulnerable sections of the society
• The government aims to double farmer’s income and have jobs for youths
• Allocation for health and well-being has increased substantially
• PM Aatmanirbhar Swasthya Bima Yojana to be launched with an outlay of INR 64,180 Crore. The amount will be spent over 6 years to improve primary, secondary and tertiary healthcare. It is in addition to National Health Mission,
• Govt will merge the nutritional supplement programme
• New Scrappage Policy – 20 years for Personal Vehicles and 15 years in case of Commercial Vehicles
• INR 2,23,486 Crore allocated for health and well-being. It is an increase of 137% from the last year
• PLI scheme to create manufacturing global champions. The government is committed to providing INR 1.97 lakh crore over 5 years
• Seven Mega textile parks will be launched over 3 years
• 217 projects worth over INR 1 lakh crore have been completed under National Infrastructure Pipeline
• A bill to be introduced to set up a development financial institution worth INR 27,000 crore
• Proposes a sharp increase in capital expenditure
• Will nudge states to spend more on infrastructure
• Government looks to complete 11,000 km of national highway infrastructure this year
• 3,500 km of highways in Tamil Nadu worth INR 3.5 lakh crore and 1,100 km of highways in Kerala with an investment of INR 25,000 crores to be allocated. 675 km highway is planned with an outlay of INR 95,000 crore to improve infrastructure in the state of West Bengal. For Assam, 1,300 km is planned over the next 3 years
• National Railway Plan prepared by the Indian Railways
• INR 1.10 lakh crore allocated for Railways, including INR 1.70 lakh crore for capital expenditure
• Centre to provide INR 18,000 crore for public buses
• 100 more cities to be added over the next 3 years to the gas distribution network
• The government announces an outlay of INR 3.05 lakh crore for the power sector
• Govt to offer support for a Fintech Hub at GIFT city
• An additional outlay of INR 1,000 crore for the solar sector
• Seven projects worth INR 2,000 crore in PPP mode for ports
• FDI in insurance raised to 74% from 49%
• Asset Reconstruction Company and Asset Management Company will help banks tackle bad loans
• Bank deposit insurance hiked to INR 5 lakh from the present INR 1 lakh
• Maturity benefits for Unit-linked Insurance Plans (ULIPs) issued on Feb 1, 2021, and afterward will be taxable if the annual premium exceeds INR 2.5 lakh
• IPO of LIC to be launched in 2021
• Govt has approved disinvestment across strategic and non-strategic sectors
• The government sets a disinvestment revenue target of INR 1.75 lakh crore for FY 2021-22
• Disinvestment of 2 public sector banks and 1 insurance company is in the works
• A further infusion of INR 20,000 crore for public sector banks will be made
• The government is committed to welfare of farmers
• Total amount paid to paddy farmers surged to INR 1.72 lakh crore in 2020-21
• More than INR 75,000 crore paid to 43.36 lakh wheat farmers in 2020-21
• MSP procurement to continue at a steady pace
• Agriculture credit target raised to INR 16.5 lakh crore
• Around 1.6 crore farmers are registered under e-NAM
• Susbstantial investments announced for fisheries
• Proposes to launch a portal for gig and construction workers
• Social security schemes will be extended to gig and platform workers. The minimum wages will apply to these workers. A single registration & licensing and online return will help reduce the compliance burden for companies.
• Ujjwala scheme will be expanded to cover over 1 crore more beneficiaries
• Proposes rationalization of the funtioning of tribunals
• Allocation for the welfare of tea workers in Assam and Bengal
• In RE 2020-21, the fiscal deficit is pegged at 9.5% of the GDP
• Fiscal deficit in BE 2021-22 is pegged at 6.8% of the GDP
• Govt aims to bring fiscal deficit below 5% of the GDP by 2025-26
• INR 30.42 lakh crore BE of total expenditure risen to a revised estimate of Rs 34.50 lakh crore