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January 16, 2022

Know 32 areas which Govt delivered on Budget promise of last year

by CA Shivam Jaiswal in Compliance Law, Income Tax

Know 32 areas which Govt delivered on Budget promise of last year

1. Retrospective Part of 2012 Amendment Nullified

Big reform by Govt. to reduce litigation, attract investment & bring certainty in tax policy. Retrospective Amendment made by Finance Act, 2012 w.r.t taxation of indirect transfer of assets located in India nullified by Taxation Laws (Amendment) Act 2021.

2. Reduction in Time for Income Tax Proceedings

Time limit to re-open IT assessment cases reduced to 3 years from 6 years. The assessment can be re-opened up to 10 years, only when there is evidence of concealment of income Rs. 50 lakh or more in a year with the approval of Pr. CCIT.

3. International Financial Service Centre (IFSC)

Tax incentives & exemptions for relocating foreign funds into IFSC to make it a hub for financial services in world. Tax exemption provided for investment division of foreign banks located in IFSC, aircraft lease rentals paid to foreign lessor etc.

4. Pre-filled ITRs

  • Pre-filled ITRs to individual taxpayers make filing of ITRs easier and encourage compliance.
  • Initial pre-filled data includes salary income.
  • Scope of data for pre-filling is being expanded to include interest, dividend etc.

5. No ITR for Specified Senior Citizen

A new section 194P inserted in Income-tax Act,1961 provides senior citizens above the age of 75 years, having only pension & interest income from accounts maintained with bank in which they receive pension will be exempted from filing ITR.

6. Relaxation for NRI’s

Finance Act, 2021 has inserted specific section in the Income-tax Act, 1961 to provide relief to NRI taxpayers who have an issue with respect to their accrued incomes in their foreign retirement accounts due to mismatch in taxation period.

7. Faceless assessment Scheme

Faceless assessment Scheme provides for a team-based assessment with dynamic jurisdiction and no human interface. It is major tax reform based on the key principles of efficiency, transparency and accountability.

8. Faceless Appeals

Faceless Appeals provide for a more efficient & transparent tax administration & enhanced taxpayer service. By 27.12.21, 62,604 appeals disposed in a faceless manner by NFAC. ITD has effectively leveraged technology for easing tax compliance for taxpayers

9. Taxpayers’ Charter

The Taxpayers’ Charter while assuring fair, courteous and rational behavior to the taxpayer on one hand also demonstrates our commitment to improve taxpayer services.

The Taxpayers’ Charter was adopted by the CBDT as per the provisions of Section 119A of Income-tax Act, 1961. It reaffirms our commitment for providing a transparent and taxpayer friendly regime. It helps forge trust between the taxpayer and the Department.

10. Relief to Small Trust

To increase Ease of Compliance of small charitable trusts running educational institutions & hospitals, tax exemption relief to such trusts is provided by the Finance Act, 2021 by raising existing threshold of annual receipts from Rs 1 crore to Rs 5 crore.

11. Affordable Rental Housing

To promote the supply of Affordable Rental Housing for migrant workers, 100% tax exemption will be available for notified Affordable Rental Housing Projects.

12. Incentive for Start-UPs

Eligibility for claiming tax holiday extended for start-ups incorporated till 31.03.22. Threshold limit for eligible start-ups was earlier raised to Rs 100cr. from Rs 25cr. The capital gain exemption for investment in start-ups extended by 1 year till 31.03.22.

13. Housing for All

To keep up the supply of affordable houses, tax holiday for affordable housing projects extended for projects approved till 31.03.2022. Additional deduction of Rs. 1.5 lakh available for purchase of a house extended till 31.03.2022.

14. Boosting Investment In Infrastructure

To ensure that various Sovereign Wealth Funds (SWFs) & Pension Funds (PFs) invest in India, Finance Act 2021 relaxed some of the conditions relating to prohibition on private funding, restriction on commercial activities & direct investment in infrastructure.

15. Measure undertaken to promote Digital transaction

Through Finance Act, 2021 monetary threshold for getting books of account audited raised to Rs 10cr, if total turnover/gross receipts made in cash doesn’t exceed 5% of total turnover/gross receipts & total expenditure in cash doesn’t exceed 5% of total expenses.

16. Measures Undertaken to Promote Digital Transaction

Through Finance Act, 2021 monetary threshold for getting books of account audited raised to Rs 10cr, if total turnover/gross receipts made in cash doesn’t exceed 5% of total turnover/gross receipts & total expenditure in cash doesn’t exceed 5% of total expenses.

17. Production Linked Incentive (PLI) Scheme for Telecom and Networking Products

Transforming India’s Telecom sector with the Production Linked Incentive (PLI) Scheme for Telecom and Networking Products attracting large scale investments and reducing India’s dependence on other countries for the import of telecom and networking products.

18. Production Linked Incentive (PLI) Scheme for Automobile Industry

A total of 115 companies have filed their application under the Production Linked Incentive (PLI) Scheme for Automobile and Auto Component Industry in India which was notified on 23.09.2021.

19. Production Linked Incentive (PLI) Scheme for Drones and Drone Components

20. Production Linked Incentive (PLI) Scheme -National programme on Advance Chemistry Cell Battery Storage

Together, these Schemes will enable India to leapfrog from traditional fossil fuel based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient Electric Vehicles (EV) based system.

21. Production Linked Incentive (PLI) Scheme for IT Hardware Product

PLI Scheme for IT Hardware Products would promote higher domestic value addition in electronics manufacturing and will contribute significantly to achieving a $1 trillion digital economy and a $5 trillion gross domestic product (GDP) by 2025.

22. Production Linked Incentive (PLI) Scheme for Mobile Manufacturing and Specified Electronic Component

PLI Scheme for Mobile Manufacturing & Specified Electronic Components is tremendously boosting the electronics manufacturing landscape and establishing India at the global level in electronics sector.

23. PLI Scheme makes India now the 2nd largest mobile manufacture.

24. Production Linked Incentive (PLI) Scheme for White Goods

PLI Scheme for White Goods approved by the Cabinet in April 2021, is designed to create a complete component ecosystem in India and make India an integral part of the global supply chains.

25. Agriculture infrastructure Fund for Agriculture Product Market Commitees

In July 2020, AIF was announced to provide a medium-long term debt financial facility for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and financial support.

26. Minimum Support Price

The Government is committed to safeguard the welfare of the farmers with the increase in MSP value, no. of procurement centers and payment to farmers.

27. Increase Credit flow for Agriculture Sector

A landmark initiative to boost agriculture sector with substantial investments through increased credit flow.

28. National Agriculture Market (e-NAM)

The National Agriculture Market (e-NAM) is expanding to ease farmers. The pan-India trading portal is helping realize the vision of “One Nation, One Market” for agri-produce

29. Boosting India’s Health Sector

The health sector received a big boost with the budget outlay as the Government plans to release additional resources for public health sector enabling it to get ready for the future.

30. National COVID19 Vaccination Programme

India’s National COVID19 Vaccination Programme is built on scientific & epidemiological evidence. @WHO guidelines & global best practices were implemented through effective & efficient participation of States/UTs & people at large to fight the pandemic.

31. Pneumococcal Conjugate Vaccine (PCV)

Nationwide expansion of Pneumococcal Conjugate Vaccine (PCV) was completed on 29th October 2021 under the Universal Immunization Programme (UIP). It is expected to reduce children’s morbidity and mortality due to pneumococcal pneumonia.

32. PM Ayushman Bharat Health Infrastructure Mission (PMABHIM)

PM Ayushman Bharat Health Infrastructure Mission (PMABHIM) was announced as a long-term health infrastructure development scheme, to help strengthen the country’s health infrastructure and the ability to fight & contain disease outbreaks in the future.

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