rationalization of procedures and easing of compliance. The following are the details for same.
- Direct Tax Proposals: The FM provided relief to senior citizens in the filing of income tax returns. The compliance burden on senior citizens who are of 75 years of age and above is reduced. The Senior citizens having an only pension and interest income as their income source are exempted from filing their income tax return. The budget also proposed to extend the eligibility period for a claim of the additional deduction for the interest of Rs. 1.5 lakh paid for a loan taken for the purchase of an affordable house to 31st March 2022.
- Also to boost startups, FM announced an extension in the eligibility for claiming tax holiday for startups by one more year that is till 31st March 2022. To provide funds to the startups, the FM extended the Capital Gains exemption for investment in startups by one more year till 31st March 2022.
- The budget mentions about a reduction in the time-limit for reopening of income tax proceeding from the current 6 years to 3 years in order to reduce compliance burden. However, in serious tax evasion cases, where there is evidence of concealment of income of Rs. 50 lakh or more in a year, the assessment can be reopened up to 10 years, once approved by Principal Chief Commissioner.
- The Dispute Resolution Committee will be constituted with an aim to reduce litigation of small taxpayers. Anyone with a taxable income up to Rs. 50 lakh and disputed income up to Rs. 10 lakh is eligible to approach the Committee. Also, National Faceless Income Tax Appellate Tribunal Centre will be set up.
- Also, to increase digital transactions and for those who mostly prefer digital transactions, the Budget proposes to increase the limit for tax audit from Rs. 5 Crore to Rs. 10 Crore.
- To reduce the compliance burden on the small charitable trust who are undertaking educational institutions and hospitals, the Budget proposes to increase the limit on annual receipts for these trusts from Rs.1 Crore to Rs. 5 Crore for non-applicability of various compliances.
- FM stated that late deposit of employee's contribution to the Provident Fund by the employer will not be allowed as the deduction to the employer. The advanced tax liability on the dividend income will arise after the declaration of payment of dividends.
- Indirect Tax Proposals: FM mentioned that artificial intelligence technology is deployed to identity tax evaders and fake billers, thus launching special drives against them. For the custom duty, FM announced the withdrawal of a few exemptions on parts of chargers and sub-parts of mobile phones further some parts of mobiles will move from “NIL” rate to a moderate 2.5%. The customs duty is reduced by 7.5% on semis, flat, and long products of non-alloy and stainless steel. Also, an exempting duty on steel scrap up to 31st March 2022 was announced by FM. To help textile industries, a uniform deduction of the BCD rates on Caprolactam, nylon chips and nylon fibre and yarn to 5% was announced. FM has stated an increase in customs duty on cotton to 10%, silk to 15% and auto parts to 15%. The Custom duty on copper scrap cut to 2.5%. The Custom duty on solar inverter is raised to 20% from 5% and on solar lanterns, it is raised from 5% to 15%. The Tunnel Boring Machines will be having a custom duty of 7%.
