Less than a week is left for the Union Budget to be presented. Finance Minister Nirmala Sitharaman will present the budget in the Lok Sabha on February 1. This will be his fourth consecutive budget. He presented the budget for the first time in 2019. Ever since he started presenting the budget, many new beginnings have been made, old traditions have been broken. In the year 2020, instead of using leather-beefcase for budget documents, he used traditional bookkeeping. In 2021, he made the budget presentation digital. Bookkeeping was replaced by tablets and digital copying of budget documents was introduced.
Last year’s budget was the first budget after the Corona epidemic started. Therefore, the focus of the government was on dealing with the epidemic in this. The Finance Minister had made big announcements for the health sector. More allocations were made to set up AIIMS and other medical institutions across the country. This increased the allocation for healthcare by 137 per cent to Rs 2.23 lakh crore in the financial year 2021-22. The Finance Minister had presented a plan to set up wellness centers and covid vaccination centers across the country.
1. Health and Wellbeing
2. Physical and Financial Capital, Infrastructure
3. Inclusive Development for Aspirational India
4. Reinvigorating Human Capital
5. Innovation and R&D
6. Minimum Government Maximum Governance
Let us now know about the big announcement of changes in last year’s budget, which are going to decide the direction and future of the Indian economy for the next several years.
tax related changes
Income tax relief for senior citizens
Now senior citizens above the age of 75 years are not required to file income tax return. The condition is that their source of income should be only pension and interest income. Under Section 194P of the Income Tax Act, banks have been allowed to deduct tax at source of income of such elderly persons. With this decision, elderly people do not need to file income tax returns.
tax on dividends
Finance Minister Nirmala Sitharaman had announced that the government will levy advance tax on dividend income only after the dividend has been declared. Till the year 2021, the taxpayers had to pay interest on the advance tax of the Inaccurate Dividends. Since dividend payouts are not pre-determined, this announcement last year has helped taxpayers save interest. Apart from this, the government has exempted dividends on Real Estate Infrastructure Trusts (Reit) and Infrastructure Investment Trusts (IET) from TDS.
Tax benefits for startups
Last year, Finance Minister Nirmala Sitharaman made a big announcement in the budget to promote startups. The tax holiday for startups was extended till March 31, 2022. This meant that startups incorporated between April 1, 2016 and March 31, 2021 (with a turnover of less than Rs 250 crore) could claim 100% tax rebate on capital gains for meeting working capital requirements.
IT Proceedings
The reopening period for assessment of disputed cases related to income tax was reduced from six years to 3 per cent. In cases of serious fraud in which undisclosed income exceeds Rs 50 lakh, the reopening period was extended to 10 years.
Faceless Income Tax Appellate Tribunal
Keeping in view the objective of Minimum Government Maximum Governance, the Income Tax Appellate Tribunal now conducts only electronic, faceless presidings. This has helped in increasing transparency.
Infrastructure and real estate related changes
It was announced to introduce a new bill to create a Development Financial Institution (DFI). This will help in providing funds for infrastructure projects.
In order to promote affordable housing, it was announced to give tax relief of up to Rs 1.5 lakh to the customers on the interest paid on the home loan till March 31, 2022. Affordable housing projects were also allowed to take advantage of the tax holiday till March 31, 2022.
Also read: Union Budget 2022: Rs 3 lakh crore can be received for food and fertilizer subsidy
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