Budget Highlights 2021 – Income Tax Slab Rates

The Union budget for 2021 was declared in parliament. The finance minister also gave a strong presentation of the budget in parliament. Even the most pressing issues in the country were started in the budget address. There was also discussion on how to address these problems and bring them into motion. According to the finance minister, retirees and veterans are not allowed to file tax returns. The decision was made in the best interests of the elders. It has been said that the elderly have had a lot of problems in their 75 years of democracy. So now is the time to give them some relief and relaxation so that they can live out the rest of their lives to the fullest.

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The issue of nonresident Indians was also brought up. They are the ones who send India millions of dollars every month. They are extremely important to our economy. According to the finance minister, they should also be granted tax relief so that they can better manage their finances and provide for their families. Prior to that, NRIs had to pay twice as much in taxes. The statute, however, has since been changed. You would not be subjected to double taxation. The tax audit volume was increased from 5 million rupees to 10 million rupees to alleviate the burden on Indians living abroad.

Sitharaman also stated that if proof of hidden income of Rs 50 lakh or more is discovered within a year, the re-evaluation will be opened for ten years. “A revaluation will only take place for ten years if there is significant tax evasion and evidence is provided that income of 50 lakh or more per year is withheld. The range will be closed to the public for the next three years.

The bulk of the country’s population is employed in clerical positions. They don’t own a business and rely solely on their earnings to meet their needs. Employee taxes will be reduced as well, enabling them to unwind and improve their standard of living even in competitive times.

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Income was kept tax-free below Rs 2.5 per annum based on last year’s tax rates. In addition, a 5% income tax on income between 2.5 and 5 lakhs of rupees per year was declared, down from 20% previously, and a 10% tax on income between 5 and 7.5 lakhs of rupees per year was declared. For those earning between 7.5 and 10 lakhs per year, the Treasury Secretary levied a 15% tax and said those earning between 10 and 12.5 lakhs per year should now pay a 20% tax. It had previously been set at 30%. The new tax rate is 25 percent for those earning between 12.5 and 15 lakh per year, and 30 percent for those earning more than 15 lakh per year.

In addition, the finance minister announced a reduction in the general sales tax rate. In this regard, the government has announced that it will take the necessary measures. It was also announced that this year’s budget and tax structure will be completely different from previous years. The pandemic affected the entire world this year, as well; many people lost their lives, and several people saw their incomes plummet by hundreds of percent. Furthermore, businesses, especially offline businesses, did not have a good year last year. As a consequence, it is the government’s responsibility to address the problems that the pandemic and government shutdown have caused.

To make the process more effective, the government proposed shortening the time it takes to generate and collect income tax. The previous deadline for filing tax returns was March 2022. The new dates, on the other hand, are set for December 2021. The aim of this decision was to simplify the tax system to make it more efficient and error-free.

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The Union budget proposes restricting the time to claim an additional deduction for interest paid on a loan used to buy affordable housing to 1,50000 rupees until March 31, 2022, in order to enable people to buy affordable housing.

Most employers do not ask their employees to contribute to a number of social funds. This process is vital for ensuring equality in the country because these pillars of well-being assist disadvantaged people in society in developing and progressing by involving them in various activities, providing them with economic and moral assistance, and providing them with employment in various organizations.

The union’s 2021 budget proposed raising the safe haven limit on certain primary unit sales from 10% to 20% to attract home buyers and land developers.

The taxpayer gains because the tax liability on dividend income would not arise until after the dividend has been declared/paid. TDS is not applied to dividends paid to Real Estate Infrastructure Trusts or Infrastructure Investment Trusts (REIT / InvIT). It is also recommended that international portfolio holders be informed that income taxes, including dividend income, should be withheld at the contractual rate. If the applicable tax rate is lower than the MAT rate, it is also recommended that dividend payments made by international corporations be exempt from MAT collection (MAT).

As a result, this budget provides a great deal of relief and comfort to both individuals and businesses in order to encourage them. In general, the tax threshold has been lowered this year, and more leeway has been granted. The pressing need now is to fully enforce this tax system so that the budget’s projected success will become a reality.

The Finance Minister has taken a number of steps to increase tax revenue in the coming year. The period for registration and processing has also been shortened from March 2022 to December 2021 for this reason, so that all processes can be regularized and a more efficient system can be introduced in the coming year since this is an incremental transition that must be implemented in the country in order for it to be included on the list of developed countries.

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