Budget Highlights: Additional deduction of Rs 1.5 lakh for affordable housing loans taken upto March 31, 2022

Budget Highlights 

New Delhi: Finance Minister Nirmala Sitharaman presented her third Budget today. Union Budget 2021 was much anticipated as it came at a time when the economy is reeling from the negative impact of the coronavirus. The pandemic, which has left millions dead and jobless, is far from over and people were looking forwards to Budget to see what the government announced to boost economic recovery and people's income.

Here are Union Budget 2021 key highlights:

Circumstances like never before

The preparation of this Budget was undertaken in circumstances like never before, in view of calamities that have affected a country or a region within a country. But what we have endured with COVID-19 to 2020 is Sui generis. When I presented the budget last year we could not have imagined that global economy would be pushed to contraction.

Mini Budgets:

In May 2020, govt announced Atmanirbhar packages. Two more later in the year. The total financial impact of all AatmaNirbharBharat packages, including measures taken by RBI, was about Rs 27.1 lakh crore, more than 13% of GDP. The govt stretched its resources for the benefit of the poorest of the poor The PM Garib Kalyan Yojana, the three Aatma Nirbhar Bharat packages and subsequent announcements were like five mini-budgets in themselves.

Health:

• Investment in health infrastructure increased substantially
• PM Atma Nirmbhar Swasthya Bharat Yojna will be launched
• Rs 64,180 crore spending plan for healthcare over the next six years. This is in addition to the National Health Mission.
• 17,000 rural and 11,000 urban health and wellness centres to be set up
• Integrated public health labs to be set up in each district
• This will develop capacities of primary, secondary and tertiary healthcare
• 3,500 crore for covid vaccine in 21-22. Committed to provide more if required
• Health outlay: Over 137% increase YoY
• Urban Swachh Bharat Mission 2.0 will be rolled out with an outlay of Rs 1.48 trillion over 5 years:

Auto:

• Voluntary vehicle crapping policy soon
• Vehicles to undergo test
• Personal vehicles - 20 years. commercial - 15 years

Infrastructure and Financial Capital:

• For a 5 trillion economy, manufacturing has to grow in double digits on a sustained basis
• Textiles - Mega investment textile park scheme will be launched. This will be in addition to the PLI scheme. 
• 7 textile parks will be established over 3 years
• 217 projects have been completed
• NIP is a specific target which is the govt is committed to achieve.
• Infra needs long term debt financing
• A new bill to develop a new institution. 
• Lending portfolio of 5 lakh crore for this DFI within 3 years
• National Montetisation Pipeline for brown filed assets will be launched
• NHAI and PGCIL to play a key role

Highway, Railway Projects:

• 500 km of national highway works in Tamil Nadu at an investment of 1.03 lakh crore
• 1100 km in the state of Kerala at an investment of Rs 6500 crore
• 6075 km in West Bengal at a cost of Rs 25,000 crore
• 1.18 lakh crore for Ministry of Road Transport and Highways for Ministry of Roads and Transport
• Railway has prepared a national rail plan for India 2030
• WDFC and EDFC will be commissioned  by June 2022
• Son Nagar-Gomosh section EDFC will be taken up under PPP
• New dedicated freight corridors- Itarsi-Vijaywada, Kharagpur-Vijayawada and Bhusawal-Dankuni
• Vistadome coaches in tourist routes
• Automatic train protection system in busy corridors. 
• Over 1 lakh in capital infrastructure

Urban transport, Metro:

• Urban infra - New scheme at a cost of Rs, 8,000 crore for bus transport augmentation in cities
• 1,016 km of metro lines is under construction in the country.
• Central counterpart funding will be provided to kochi metro phase 2
• Chennai Metro phase, Bengaluru metro phase 2a and 2b, Nagpur metro phase 2 and Nashik metro will also receive central counterpart funding

Energy, Power:

• Distribution companies are monopolies
• There is a need to provide choice to consumers
• A framework will be put in place to allow consumers to choose between more than one provider
• A framework to be put in place to give consumers alternate to choose more than one distributing company
• New Power scheme outlay: Rs 3,05,984 crore over 5 years

Shipping: 

• A new scheme to facilitate flagging of ships in India
• Ships recycling - Efforts will be made to bring more ships to India
• 7 projects worth Rs 2000 crore will be offered at major ports in FY21-22
• Scheme for promoting flagging of merchant ships: Outlay Rs 1,624 crore over 5 years

Petroleum, Natural Gas and Solar Energy:

• Ujjwala Scheme to cover 1 crore more beneficiaries
• 100 more cities to be covered under city gas supply network
• 1000 crore to solar energy commission

FY22 fiscal deficit seen at 6.8%

• The govt has set a fiscal deficit target of 6.8% for the net financial year. For the current financial year, the government had pegged the fiscal deficit at 3.5% for FY21 in the last budget before the onset of the Covid-19 crisis.

Government to allow one-person companies

• No restriction on paid-up capital and turnover, to incentivise incorporation of one-person companies

• Conversion of one-person company to any other kind, reducing residency limit from 182 days to 120 days
  Allow non-resident Indians to incorporate one-person companies in India

• The FM proposed to revise definition under Companies Act, 2013 for small companies by increasing their threshold for capitalization to not exceeding Rs 50 lakh to not exceeding Rs 2 crore and turnover not exceeding Rs 2 crore to not exceeding Rs 20 crore

PSB recapitalisation

• Government allots Rs 20,000 crore for bank recapitalisation, as FM emphasizes the need to clean up banks' books

Government to amend Insurance Act to allow higher FDI

• FDI limit in insurance increase to 74% from 49%.
• FM proposes to consolidate provisions of SEBI Act, Depositories Act, Securities Contracts Regulation Act, Government Securities Act

Tax:

• Senior citizens - those above 75 years and above who have only pension and interest income need not file returns. Their banks will deduct the tax
• Dispute resolution committee will be set up for small taxpayers
• National faceless income tax appellate tribunal will be set up
• NRI - Rules will be notified to reduce trouble with double taxation
• Additional deduction of Rs 1.5 lakh will be available for loans taking upto March 31, 2022
• Affordable housing projects can also avail tax holiday till march 31, 2022
• Some employers don't deposit PF and gratuity Late deposit will not be allowed as a deduction to the employers
• Eligibility for tax holidays to be extended by one more years
• Anyone with taxable income up to 50 lakh and disputable income up to 10 lakh to approach committee
• Dividend payment in REIT and INVIT exempt from TDS
• Reduction of tax on dividend income at lower rate

Customs:

• Over 400 old exemptions will be reviewed
• electronic and mobile phone industry - some parts of phones to move from nil to 2.5% duty
• Metal recyclers - Duty on scrap to be exempted till march 31, 2022
• Copper scrap - Duty to reduced from 5% to 2.5%
• Chemicals - Duty on naptha to be reduced to 2.5%
• Rationalising customs duty on gold and silver
• Phased manufacturing plan for solar cells
• Withdraw exemptions on tunnel boring machines
• Steel screws - Duty from 10% to 15%