NEW DELHI: Finance Minister (FM) Nirmala Sitharaman presented the Union Budget 2021-22 in Parliament and among some very significant changes like senior citizens above 75 years of age with only pension income and interest income will now be exempted from filing income tax returns it has made no changes in the income tax slabs.

Notably, last year in 2020, the government had bought in a new tax regime where the taxpayer got the option of taking new rates without exemptions or sticking to old rates with exemptions.

Under which the old income tax regime incomes between Rs 5 lakh and 10 lakh were taxed at 20 per cent while all incomes above Rs 10 lakh are taxed at 30 per cent, where as in the income tax scheme introduced last year slab wise rates were announced ranging from 10 per cent for incomes between Rs 5 lakh and Rs 7.5 lakh per year, to 30 per cent for incomes above Rs 15 lakh per year.

Sitharaman announced that India’s fiscal deficit is set to jump to 9.5 per cent of Gross Domestic Product (GDP) in 2020-21 as per revised estimates.

As one highlight of the NDA government, FM said that the income tax return filers have increased to 6.48 cr in 2020 from 3.31 cr in 2014, a significant rise.

However one dampener for the citizens could be that the FM has proposed an agriculture Infrastructure and Development Cess (AIDC) of Rs 2.5 per litre has been imposed on petrol and Rs 4 per litre on diesel on the already skyrocketing prices.  

Although after announcing the AIDC, FM Sitharaman said that said in her budget speech that while applying this cess, the government have taken care not to put additional burden on consumers on most items since it has also proposed to reduce Basic Customs Duty on these items.

Consequently, unbranded petrol and diesel will attract basic excise duty of Rs 1.4, and Rs 1.8 per litre respectively, so it remains to be seen what kind of impact it will have on the fuel prices.

Apart from scrapping of income tax for senior citizens under certain conditions, the FM has announced new rules for removal of double taxation for NRIs, a reduction in the time period of tax assessments among other measures and that the advance tax liability on dividend income shall arise after declaration of payment of dividend.

Another highlight for I-T assessments is that the time bar for reopening I-T assessment cases halved to 3 years, for serious frauds it is 10 years.

Sitharaman in her Budget speech also announced that fixed depositors of banks will have an 'easy and time-bound' access to funds if a bank lands into trouble under the Deposit Insurance and Credit Guarantee Corporation Act (DICGC), 1961.

Last year, the amount of deposit insurance under DICGC per individual was hiked to Rs 5 lakh from Rs 1 lakh and as of now it takes a very long time before depositors get back their dues since the process of liquidation or any resolution is long drawn. The fixed depositors of PMC Bank depositors are still fighting for any relief as the bank is awaiting some revival proposals.

In health care spending, FM Sitharaman announced a total spend of around Rs 2 lakh crore with a Rs 35,000 crore on Covid-19 vaccine development and inoculation.

In affordable housing projects Sitharaman said that the government saw  ‘Housing for All’ and affordable housing as priority areas.

The FM has proposed to extend the date of loan sanction for availing this additional deduction by a year to March 2022 from March 2021 earlier in order to ensure that more persons avail this benefit.

Sitharaman said, “I propose to extend the eligibility of this deduction by one more year, to 31st March 2022.” 

To keep up the supply of affordable houses, the Budget has also proposed that affordable housing projects can avail a tax holiday for one more year i.e, till 31st March, 2022.