Tax Proposals

Direct Taxes

• Exemption from filing tax returns for senior citizens over 75 years of age and having only pension and interest income; tax to be deducted by paying bank
• Time limit for re-opening cases reduced to 3 years from 6 years
• Serious tax evasion cases, with evidence of concealment of income of Rs. 50 lakh or more in a year, to be re-opened only up to 10 years, with approval of the Principal Chief Commissioner
• Dispute Resolution Committee to be set up for taxpayers with taxable income up to Rs. 50 lakh and disputed income up to Rs. 10 lakh
• National Faceless Income Tax Appellate Tribunal Centre to be established
• Rules to be notified for removing hardships faced by NRIs regarding their foreign retirement accounts
• Limit of turnover for tax audit increased to 10 crore from Rs. 5 crore for entities carrying out 95% transactions digitally
• Dividend payment to REIT/ InvIT exempt from TDS
• Advance tax liability on dividend income only after declaration/ payment of dividend
• Deduction of tax on dividend income at lower treaty rate for Foreign Portfolio Investors

Deduction of tax at source on payment of certain sum for purchase of goods.

 194Q. Any person, being a buyer who is responsible for paying any sum to any resident (hereafter in this section referred to as the seller) for purchase of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year, shall, at the time of credit of such sum to the account of the seller or at the time of payment thereof by any mode, whichever is earlier, deduct an amount equal to 0.1 per cent. of such sum exceeding fifty lakh rupees as income-tax. However Section is not applicable if the seller is having a turnover more than 10 crore and deducting the TCS .

• Infrastructure Debt Funds made eligible to raise funds by issuing Zero Coupon Bonds
• Relaxation of some conditions relating to prohibition on private funding, restriction on commercial activities, and direct investment

• Additional deduction of interest, up to Rs. 1.5 lakh, for loan taken to buy an affordable house extended for loans taken till March 2022
• Tax holiday for Affordable Housing projects extended till March 2022
• Tax exemption allowed for notified Affordable Rental Housing Projects

• Details of capital gains from listed securities, dividend income, interest from banks, etc. to be pre-filled in returns

• Exemption limit of annual receipt revised from ₹1 crore to ₹5 crore for small charitable trusts running schools and hospitals
• Late deposit of employee‟s contribution by the employer not to be allowed as deduction to the employer
• Eligibility for tax holiday claim for start-ups extended by one more year
• Capital gains exemption for investment in start-ups extended till 31^st March, 2022

GST:

 Proposed to omit the requirement of furnishing the GSTR audit report in the form GSTR-9C.  As per the Finance Bill 2021, “In section 35 of the Central Goods and Services Tax Act,sub-section (5) shall be omitted.”

INDIRECT TAX

1. FM Hails record collections due to crackdown

2. Inverted duty structure to be reduced

3. Customs Duty : Massice Review of 400 old exemptions

4. Revised Customs Duty structure

5. 2.5% import on parts of mobile phone

6. Iron & steel - 7.5% on import duty

7. Steel scrap duty reduced till 31.3.2022

8. Copper- 2.5% from 5%

9. Textiles - BCD on nylon articles reduced to 5%

10. Chemicals - NAFTA reduced

11. Gold & silver reduced

12. Solar energy - raising on solar invesrterd & lanterns increased

13. Steel screws 15% from 10%

14. Leathers import duty increased

15. Gemstones increased

16. Definite timelines for customs investigations

COMPANIES ACT

• Govt. provides a big boost to the Startups by allowing Non-Residents to incorporate OPCs in India, residency for a person setting up a One person company from 182 days to 128 days in India.
• ‘Capital’ (Rs 50 lacs) and ‘Turnover’ ( Rs 2 crs) qualifying criteria for ‘One Person Company’ are proposed to be removed
• Definition of small companies to be raised by increasing the capital limit from Rs 50 lakh to Rs 2 crore and turnover from Rs 2 crore to Rs. 20 crores
• Govt. to introduce Data Analytics, Artificial Intelligence, Machine language-driven 3.0 version of MCA portal

OTHERS

• Govt. to consolidate SEBI Act, 1992, Depositories Act, 1996 and SCRA into a single Securities Market Code
• FDI in the Insurance sector to be increased from 49% to 74% with foreign control but with safeguards
• SEBI will be notified as a regulator for a gold exchange
• FM proposes the decriminalization of LLP Act, 2008