Budget 2021: Direct Tax Proposals Highlights

FM Nirmala Sitaraman has furnished Finance Budget 2021. Below are the Highlights of Direct Tax Proposals.

1. Relief given to the senior citizen, having only pension and interest income. The exemption is given to them from filing ITR. Paying banks will do still deduct TDS if applicable.

2. Income Tax Reassessment Limit has been Decreased from 6 years to 3 years. But in the case of Serious tax evasion, where evasion evidence is Rs. 50 lakh or more then reopening can be done within 10 years with approval.

3. Dispute resolution committee will be faceless. Anyone with a total income less than 50 lacs and disputed income less than 10 Lacs can approach this committee.

4. Faceless ITAT center will be set up. In this case, personal hearings will be conducted through VC.

5. Tax Audits limit enhanced to Rs. 10 Cr in case of digital transactions (up to 95% Digital Transactions). Earlier this limit was Rs. 5 cr.

6. Advance tax liability on dividends will arise only after the declaration of dividends.

7. Affordable housing Rs, 1.5 lac deduction will now be even available for a loan taken till 31.3.2022.

8. 80IBA deduction extended to 31.3.2022.

9. Pre-filled income tax return (ITR) scope enhanced. ITR will have pre-filled data regarding Dividends, post office interest income, salary, etc.

10. Trusts: educational and hospitals: limit increased from Rs. 1 Cr to Rs. 5 crores (10(23C))

11. Late deposit of employee contribution of PF will now be not allowed as deduction.

12. LLP decriminalization will be made available soon

13. LIC IPO will come soon in 2022

14. MCA version 3 expected soon

15. Infusion of Rs. 20000 cr. For public sector banks

16. FDI in the insurance sector hiked to 74% from 49%

17. Director Residence criteria reduced to 120 days from earlier 182 days

18. OPC proposed to be incorporated by foreigners as well

19. Policy for disinvestment in all nonstrategic and strategic sectors

20. Separate administration structure proposed to promote ease of doing business

21. Custom duty changes made to support domestic manufacturing