No changes in personal, corporate tax rates; interest on employee contributions to PF over Rs 2.5 lakh per annum taxable
STATE TIMES NEWS
NEW DELHI: Finance Minister Nirmala Sitharaman on Monday proposed a sharp increase in expenditure on infrastructure, doubling of healthcare spending and raising the cap on foreign investment in insurance in her Budget for the next fiscal in a bid to pull the economy out of the pandemic-induced trough.The Budget for the fiscal year beginning April made no changes in personal or corporate tax rates but raised customs duties on certain auto parts, mobile phone components and solar panels in order to provide impetus to domestic manufacturing.It also imposed an Agriculture Infrastructure and Development Cess (AIDC) on the import of certain items (like apples, peas, lentils, alcohol, chemicals, silver and cotton) to finance agricultural infrastructure and other development expenditure.
New Delhi: The Centre has announced a maiden gas pipeline project for the Union Territory of Jammu and Kashmir.In her Budget speech, Finance Minister Nirmala Sitharaman said a gas pipeline project will be taken up in Jammu and Kashmir.She also announced setting up of a central university in Leh district of Union Territory of Ladakh for accessible higher education.The Centre has provisioned Rs 30,757 crore budget for the Union Territory of Jammu and Kashmir, while Ladakh has been allocated Rs 5,958 crore in the Union Budget for 2021-22.“We recognise our commitment to fiscal federalism and propose therefore to adhere to this recommendation. Jammu and Kashmir in the 14th Finance Commission was entitled to get devolution being a State. Now, the funds to the UTs of Jammu and Kashmir and Ladakh would be provided by the Centre,” Sitharaman said. The higher education sector in the country is set to get a boost with the Union Budget 2021-22 promising a Central University for Leh, a legislation to set up Higher Education Commission of India, and increasing academic collaboration with foreign institutions among other measures.“For accessible higher education in Ladakh, I propose to set up a Central University in Leh,” Finance Minister said.
But its impact on prices has been offset by an equivalent or more reduction in the import duty.In her third budget and the Modi government’s eighth, Sitharaman proposed a vehicle scrappage policy, Rs 20,000 crore recapitalisation of public sector banks, divestment of some state-owned lenders and sale of non-strategic PSUs with a view to bolstering an economy that plunged into its deepest recorded slump amid the pandemic outbreak.
jump in indices on a budget day in over two decades while India Inc hailed Sitharaman as a reformist.Prime Minister Narendra Modi said the Budget puts a lot of emphasis on strengthening the farm sector but opposition Congress termed it a “letdown like never before” and said it was a case of “wrong diagnosis and prescription”.In the Budget for 2021-22, Sitharaman made interest on employee contributions to PF over Rs 2.5 lakh per annum taxable, effective April 1, 2021In the previous 2020 Budget, the finance minister had capped the tax exemption on employers contribution to PF, NPS and superannuation funds at an aggregate of Rs 7.5 lakh per annum.In a relief to senior citizens, those above 75 years of age with only pension and interest income would no longer have to file income tax returns, subject to certain conditions.She allocated Rs 5.54 lakh crore for capital creation in the infrastructure sector. This included Rs 1.18 lakh crore for the roads and highways sector and Rs 1.08 lakh crore for railways.
The allocation was 37 per cent more than last year.The increased spending is aimed at creating demand in the economy and support job creation.With just 1 per cent of GDP being spent on health, she proposed raising the spending to Rs 2.2 lakh crore next fiscal to help improve health systems as well as fund the vaccination drive against coronavirus.
New Delhi: Asserting that villages and farmers are at the heart of the Union Budget presented on Monday, Prime Minister Narendra Modi said it has put a lot of emphasis on strengthening the farming sector and increasing farmers’ income while making an allocation to further empower agriculture mandis.In televised remarks after Finance Minister Nirmala Sitharaman presented the budget, Modi said it has many provisions for the agriculture sector, including for making loans easier for farmers.His comments came amid long-running protests by a section of farmers against three agri laws, with protesting farmer unions demanding their repeal and the government insisting that they are for the good of farmers but offering to put them for 18 months.Lauding the budget, Modi said one hardly comes across a budget that elicits so much positive response within an hour or two of its presentation, and noted that this was tabled under extraordinary circumstances when many experts were of the view that the government will put more burden on the common man.The budget carries the vision of ‘Aatmanirbhar Bharat’ (self-reliant India) and lays a strong foundation as a new decade begins, he said.“This budget has a feel of reality and confidence of development as well and showcases India’s self-belief. It will also infuse new confidence in the world in these difficult times,” he said, in reference to the Covid pandemic hitting the global economy hard.“We have taken the approach of widening new opportunities for growth, creation of new opportunities for our youth, giving a new dimension to human resources, develop new sectors for infrastructure development, and moving towards technology and bringing new reforms in this Budget,” he said.It’s a pro-active budget that gives a boost to wealth as well as wellness, Modi said.This budget talks of all-around development for all parts of the country with a focus on southern and North East India besides Ladakh, he said, adding that it is a “big step” towards making coastal states like Tamil Nadu, Kerala and West Bengal a “business powerhouse”.It is also aimed at boosting people’s ease of living by simplifying procedures and rules, and seeks to bring about positive changes for the infrastructure sector, industry, investors and individuals, the prime minister said.Expressing happiness that the transparency factor of the budget has been appreciated by experts, he said it budget doesn’t have an iota of “reactive” and has been “pro-active” with its focus on wealth as well as wellness.Noting that the MSME sector allocation has been doubled to improve employment opportunities, Modi said the budget’s emphasis on research and innovation will help the youth.The common man and woman will benefit from stress on health, sanitation, nutrition, clean water and equality of opportunities while enhanced allocation in infrastructure and procedural reforms will lead to job creation and growth, he said.
“We decided to spend big on infrastructure in this Budget. We attended to the need of the health sector,” she told a press conference after presenting the Budget for 2021-22 in Lok Sabha. “We decided to give greater impetus to the economy in this Budget.” Additional resources required are targeted to be raised through divestment and monetisation.While Rs 1.75 lakh crore is being targeted from the sale of non-strategic public sector companies, the government will get Rs 30,000 crore from the new agri cess.With government spending more to support the economy during the pandemic that hit revenue collections, the fiscal deficit — the difference between revenue and expenditure — for the current year was put at 9.5 per cent of the gross domestic product (GDP) as against a target of 3.5 per cent. For the next fiscal, the fiscal deficit was projected at 6.8 per cent.“We have spent, we have spent and we have spent. That’s why fiscal deficit has reached this number,” she said.She also signalled that the fiscal policy support of the economy will continue for at least three years, with the deficit being brought under 4.5 per cent by FY2025-26.Officials in her ministry at the press conference explained that the new limit for interest-free PF would hit less than 1 per cent of the total EPFO base.For the agriculture sector, she maintained the reform momentum such as the extension of farm credit provision to farmers, commodity expansion under ‘Operation Green’ and extension of Agriculture Infrastructure Fund (AIF) to APMCs.In order to incentivise the purchase of affordable house, the finance minister proposed to extend the period for claiming an additional deduction for the interest of Rs 1.5 lakh paid for home loans by one year to March 31, 2022.To remove hardship faced by NRIs in respect of their income accrued on foreign retirement benefits account due to mismatch in taxation, new rules for alignment will be notified.Foreign direct investment (FDI) limit in insurance was proposed to be raised to 74 per cent from the current 49 per cent.Also, a tax deducted at source (TDS) of 0.1 per cent will be levied on the purchase of goods exceeding Rs 50 lakh in a year. The responsibility of deduction shall lie only on persons whose turnover exceeds Rs 10 crore.Reduction in customs duties on gold and silver should bring some relief to the consumers while the hike in import duty on certain iron and steel products may adversely affect the real estate and infrastructure sector.An agri cess of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel was also slapped but this was offset by a reduction of an equivalent amount in the excise duty — making it price neutral for consumers.Tax filing simplification for investors through pre-filled capital gains and interest income and a reduction in the limit for tax assessment reopening from six to three years will improve taxpayer confidence.The policy on rationalisation of customs rates and procedures which started a few years back has been further moved ahead this year with a plan to review over 400 customs exemptions and a policy of having future exemptions with a validity period of two years.The government capital expenditure as a proportion of GDP is set to pick up from 1.7 per cent in FY20 to 2.3 per cent in FY21 and further to 2.5 per cent in FY22, which will be a 17-year high figure and will enhance medium-term growth prospects.To address concerns around asset quality, credit loss and liquidity stress, this Budget proposed to infuse additional capital of Rs 20,000 crore into PSU banks for providing continued credit access to wholesale and retail borrowers.On the new cess, Finance Secretary Ajay Bhushan Pandey said, “We have imposed agri cess on about 14-15 items. The total amount that we estimate (to get) is Rs 30,000 crore.”Customs duty on cotton, silk, maize bran, certain gems and jewellery, specified auto parts, screws and nuts was hiked.To promote value addition in the electronics sector, the same was raised for printed circuit board assembly, wires and cables, solar inverters and solar lamps.The import duty on naphtha, iron and steel melting scrap, aircraft components, gold and silver was reduced.“In Budget 2019-20, I had mentioned about the setting-up of Higher Education Commission of India. We would be introducing a legislation this year to implement the same. It will be an umbrella body having 4 separate vehicles for standard-setting, accreditation, regulation, and funding,” she added.The finance minister announced that nine cities will create formal umbrella structures so that these institutions can have better synergy, while also retaining their internal autonomy.“Many of our cities have various research institutions, universities, and colleges supported by the Government of India. Hyderabad for example, has about 40 such major institutions. In nine such cities, we will create formal umbrella structures so that these institutions can have better synergy, while also retaining their internal autonomy. A Glue Grant will be set aside for this purpose,” she said.The budget also proposed increased academic collaborations with foreign higher educational institutions.“To promote enhanced academic collaboration with foreign higher educational institutions, it is proposed to put in place a regulatory mechanism to permit dual degrees, joint degrees, twinning arrangements and other such mechanisms,” she said.The higher education department has been allocated Rs 38,350.65 crore for 2021-22, registering a dip of Rs 1115.87 crore.The budget for the Higher Education Financing Agency (HEFA) has been reduced from Rs 2200 crore to Rs 1 crore.The allocation for world class institutions has been increased from Rs 500 crore to Rs 1,710 crore. Similarly, the fund for scholarships for college and university students has been increased from Rs 141 crore to Rs 207 crore.“In my Budget Speech of July 2019, I had announced the National Research Foundation. We have now worked out the modalities and the NRF outlay will be of Rs 50,000 crores, over 5 years. It will ensure that the overall research ecosystem of the country is strengthened with focus on identified national-priority thrust areas,” Sitharaman said.
Voluntary vehicle crapping policy soonVehicles to undergo testPersonal vehicles – 20 years. commercial – 15 years
For a 5 trillion economy, manufacturing has to grow in double digits on a sustained basisTextiles – Mega investment textile park scheme will be launched. This will be in addition to the PLI scheme. 7 textile parks will be established over 3 years
1.18 lakh crore for Ministry of Road Transport and Highways for Ministry of Roads and TransportRailway has prepared a national rail plan for India 2030WDFC and EDFC will be commissioned by June 2022
Urban infra – New scheme at a cost of Rs, 8,000 crore for bus transport augmentation in cities1,016 km of metro lines is under construction in the country.
Distribution companies are monopoliesThere is a need to provide choice to consumersA framework will be put in place to allow consumers to choose between more than one providerA framework to be put in place to give consumers alternate to choose more than one distributing companyNew Power scheme outlay: Rs 3,05,984 crore over 5 years
Ujjwala Scheme to cover 1 crore more beneficiaries100 more cities to be covered under city gas supply network1000 crore to solar energy commission
No restriction on paid-up capital and turnover, to incentivise incorporation of one-person companiesConversion of one-person company to any other kind, reducing residency limit from 182 days to 120 daysAllow non-resident Indians to incorporate one-person companies in IndiaThe FM proposed to revise definition under Companies Act, 2013 for small companies by increasing their threshold for capitalization to not exceeding Rs 50 lakh to not exceeding Rs 2 crore and turnover not exceeding Rs 2 crore to not exceeding Rs 20 crore
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