Finance Minister Nirmala Sitharaman has arranged Union Budget 2021 speech. She has introduced various benefits for the investors, depositors, and taxpayers. While keeping the Income Tax part rates fixed, FM Sitharaman has provided support for senior citizens above 75 and NRIs by introducing few changes.
Senior citizens who are earning pension and income from deposits are excused from filing Income Tax Return. Annual premium up to Rs 2.5 lakh on the development of ULIP will also be exempted from Tax. However, EPF interest income above Rs 2.5 lakh will be taxable.
The Government will also take all the essential steps to provide GST relief by reducing inverted GST structures. As the FM first had promised that the post-COVID Budget 2021 will be like no other, the common man was assuming that the government would increase some tax benefits through the budget. Many experts and skillful bodies like ICAI had also supported the government to increase the judgment limit under Section 80C of the Income Tax Act.
Expect More precious Phones as Govt backpacks customs duty on parts
The Budget 2021 is based on the six columns- as physical, financial capital, and infrastructure, health and well-being, including development for aspirational India, reinvigorating human capital, innovation, and R&D, and minimum government and maximum governance.
Describing the current Budget as an active and not a reactive budget, the FM stated that India is moving from Covid-related improvements to Atmanirbhar resolve. All eyes were set on the Union Budget 2021 and besides the parliamentarians, it was seen by both domestic and foreign investors, middle class, and corporates, along with different interest groups like farmers.
The 2.5 % duty is also appropriate on parts of manufacture of PCBA (Printed Circular Board Assembly)of cellular mobile phones, camera modules, and manufacture of connectors and raw materials.
In a bid to develop the manufacturing sector in India, the government has developed the customs duty for up to 10% on mobile chargers, sub-parts of phones. This step could lead to a rise in the cost of mobile phones by 3-4% from February 2, 2021.
Government focuses on Fiscal Deficit & Tax Exemption for Senior Citizens
Finance Minister has announced some important changes to the taxation rule that includes the elimination of income tax for senior citizens under special requirements, new rules for the scrapping of double taxation for NRIs, and a decrease in the period of tax charges. She has also published that the advance tax burden on interest income will arise after the statement of payment of interests.
In her speech, Nirmala Sitharaman also said that India`s fiscal deficit is expected to jump to 9.5 percent of GDP in 2020-21 as per Updated Estimates. The rise in fiscal deficit is estimated on the account of the increase in investment
While exposing the Union Budget 2021-22 in the Lok Sabha, Sitharaman said that the government is expecting to bring down the fiscal deficit below 4.5 percent, which has risen to a high of 4.6 percent in 2019-20. The fiscal deficit is expected to go down below 4.5 percent of GDP by 2025-26
What is a Fiscal Deficit?
Fiscal Deficit is the difference between the expenditure of the government and the income generated in a financial year. It is calculated both in simple terms and as a percentage of the country`s GDP.
According to the Finance Minister, the government is planning to borrow Rs. 80,000 crores during the remaining two months of the current fiscal year.
Healthcare expenditure increases up in the budget.
The government focuses on the healthcare sector in the wake of the pandemic. The focus of the entire world has been majorly centered on the healthcare industry. Keeping with the trend, the post-COVID budget provides a major advance to healthcare and infrastructure.
In healthcare spending, Sitharaman announced a total spend of around Rs 2.23 Lakh crore on healthcare, which is a 137% increase from last year under The Atmanirbhar Swasth Bharat Yojana. The government also suggests a budget of Rs 35,000 crore on COVID 19 vaccine development and medicine. This will assure continuous healthcare services for more people.
Along with the National Health Mission, the investment of Rs 64,180 crores over the next 6 years are supposed to improve primary, secondary, and tertiary healthcare. The government has also introduced the establishment of critical care units and hospital sections in the country`s national market growth and place India as an important player in the global markets.
First Paperless Budget Has Acquired for Business Start-Ups.
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