Tax Proposals
Vision of a transparent, efficient tax system to promote investments and employment in the country with minimum burden on taxpayers
- Direct Taxes
Achievements:
- Corporate tax rate slashed to make it among the lowest in the world
- Burden of taxation on small taxpayers eased by increasing rebates
- Return filers almost doubled to 6.48 crore in 2020 from 3.31 crore in 2014
- Faceless Assessment and Faceless Appeal introduced
Relief to Senior Citizens:
- Exemption from filing tax returns for senior citizens over 75 years of age and having only pension and interest income; tax to be deducted by paying bank
Reducing Disputes, Simplifying Settlement:
- Time limit for re-opening cases reduced to 3 years from 6 years
- Serious tax evasion cases, with evidence of concealment of income of Rs. 50 lakh or more in a year, to be re-opened only up to 10 years, with approval of the Principal Chief Commissioner
- Dispute Resolution Committee to be set up for taxpayers with taxable income up to Rs. 50 lakh and disputed income up to Rs. 10 lakh
- National Faceless Income Tax Appellate Tribunal Centre to be established
- Over 1 lakh taxpayers opted to settle tax disputes of over Rs. 85,000 crore through Vivad Se Vishwas Scheme until 30th January 2021
Relaxation to NRIs:
- Rules to be notified for removing hardships faced by NRIs regarding their foreign retirement accounts
Incentivising Digital Economy:
- Limit of turnover for tax audit increased to Rs. 10 crore from Rs. 5 crore for entities carrying out 95% transactions digitally
Relief for Dividend:
- Dividend payment to REIT/ InvIT exempt from TDS
- Advance tax liability on dividend income only after declaration/ payment of dividend
- Deduction of tax on dividend income at lower treaty rate for Foreign Portfolio Investors
Attracting Foreign Investment for Infrastructure:
- Infrastructure Debt Funds made eligible to raise funds by issuing Zero Coupon Bonds
- Relaxation of some conditions relating to prohibition on private funding, restriction on commercial activities, and direct investment
Supporting ‘Housing for All’:
- Additional deduction of interest, up to Rs. 1.5 lakh, for loan taken to buy an affordable house extended for loans taken till March 2022
- Tax holiday for Affordable Housing projects extended till March 2022
- Tax exemption allowed for notified Affordable Rental Housing Projects
Tax incentives to IFSC in GIFT City:
- Tax holiday for capital gains from incomes of aircraft leasing companies
- Tax exemptions for aircraft lease rentals paid to foreign lessors
- Tax incentive for relocating foreign funds in the IFSC
- Tax exemption to investment division of foreign banks located in IFSC
Ease of Filing Taxes:
- Details of capital gains from listed securities, dividend income, interest from banks, etc. to be pre-filled in returns
Relief to Small Trusts:
- Exemption limit of annual receipt revised from ₹1 crore to ₹5 crore for small charitable trusts running schools and hospitals
Labour Welfare:
- Late deposit of employee’s contribution by the employer not to be allowed as deduction to the employer
- Eligibility for tax holiday claim for start-ups extended by one more year
- Capital gains exemption for investment in start-ups extended till 31st March, 2022
Indirect Taxes
GST:
- Measures taken till date:
- Nil return through SMS
- Quarterly return and monthly payment for small taxpayers
- Electronic invoice system
- Validated input tax statement
- Pre-filled editable GST return
- Staggering of returns filing
- Enhancement of capacity of GSTN system
- Use of deep analytics and AI to identify tax evaders
Custom Duty Rationalization:
- Twin objectives: Promoting domestic manufacturing and helping India get onto global value chain and export better
- 80 outdated exemptions already eliminated
- Revised, distortion-free customs duty structure to be put in place from 1st October 2021 by reviewing more than 400 old exemptions
- New customs duty exemptions to have validity up to the 31st March following two years from its issue date
Electronic and Mobile Phone Industry:
- Some exemptions on parts of chargers and sub-parts of mobiles withdrawn
- Duty on some parts of mobiles revised to 2.5% from ‘nil’ rate
Iron and Steel:
- Customs duty reduced uniformly to 7.5% on semis, flat, and long products of non-alloy, alloy, and stainless steels
- Duty on steel scrap exempted up to 31st March, 2022
- Anti-Dumping Duty (ADD) and Counter-Veiling Duty (CVD) revoked on certain steel products
- Duty on copper scrap reduced from 5% to 2.5%
Textiles:
- Basic Customs Duty (BCD) on caprolactam, nylon chips and nylon fiber & yarn reduced to 5%
Chemicals:
- Calibrated customs duty rates on chemicals to encourage domestic value addition and to remove inversions
- Duty on Naptha reduced to 2.5%
Gold and Silver:
- Custom duty on gold and silver to be rationalized
Renewable Energy:
- Phased manufacturing plan for solar cells and solar panels to be notified
- Duty on solar invertors raised from 5% to 20%, and on solar lanterns from 5% to 15% to encourage domestic production
Capital Equipment:
- Tunnel boring machine to now attract a customs duty of 7.5%; and its parts a duty of 2.5%
- Duty on certain auto parts increased to general rate of 15%
MSME Products:
- Duty on steel screws and plastic builder wares increased to 15%
- Prawn feed to attract customs duty of 15% from earlier rate of 5%
- Exemption on import of duty-free items rationalized to incentivize exporters of garments, leather, and handicraft items
- Exemption on imports of certain kind of leathers withdrawn
- Customs duty on finished synthetic gem stones raised to encourage domestic processing
Agriculture Products:
- Customs duty on cotton increased from nil to 10% and on raw silk and silk yarn from 10% to 15%.
- Withdrawal of end-use based concession on denatured ethyl alcohol
- Agriculture Infrastructure and Development Cess (AIDC) on a small number of items
Rationalization of Procedures and Easing of Compliance:
- Turant Customs initiative, a Faceless, Paperless, and Contactless Customs measures
- New procedure for administration of Rules of Origin
Achievements and Milestones during the COVID-19 pandemic
- Pradhan Mantri Garib Kalyan Yojana (PMGKY):
- Valued at Rs. 2.76 lakh crore
- Free food grain to 80 crore people
- Free cooking gas for 8 crore families
- Direct cash to over 40 crore farmers, women, elderly, the poor and the needy
- AatmaNirbhar Bharat package (ANB 1.0):
- Estimated at Rs. 23 lakh crore – more than 10% of GDP
- PMGKY, three ANB packages (ANB 1.0, 2.0, and 3.0), and announcements made later were like 5 mini-budgets in themselves
- Rs. 27.1 lakh crore worth of financial impact of all three ANB packages including RBI’s measures – amounting to more than 13% of GDP
- Structural reforms:
- One Nation One Ration Card
- Agriculture and Labour Reforms
- Redefinition of MSMEs
- Commercialisation of the Mineral Sector
- Privatisation of Public Sector Undertakings
- Production Linked Incentive Schemes
- Status of India’s fight against COVID-19:
- 2 Made-in-India vaccines – medically safeguarding citizens of India and those of 100-plus countries against COVID-19
- 2 or more new vaccines expected soon
- Lowest death rate per million and the lowest active cases
2021 - Year of milestones for Indian history
- 75th year of India’s independence
- 60 years of Goa’s accession to India
- 50 years of the 1971 India-Pakistan War
- Year of the 8th Census of Independent India
- India’s turn at the BRICS Presidency
- Year for Chandrayaan-3 Mission
- Haridwar MahaKumbh
Vision for AatmaNirbhar Bharat
- AatmaNirbharta – not a new idea – ancient India was self-reliant and a business epicentre of the world
- AtmaNirbhar Bharat – an expression of 130 crore Indians who have full confidence in their capabilities and skills
- Strengthening the Sankalp of:
- Nation First
- Doubling Farmer’s Income
- Strong Infrastructure
- Healthy India
- Good Governance
- Opportunities for Youth
- Education for All
- Women Empowerment
- Inclusive Development
- 13 promises made in the Union Budget 2015-16, and resonating with the vision of AatmaNirbharta, to materialise during the AmrutMahotsav of 2022 – on the 75th year of our independence