Budget 2021 -
1. Stress asset resolution – to clean up bank book
ARC and AMC will be set up to consolidate and takeover existing stressed assets and manage through alternative investment funds.
2. NCLT framework will be strengthened and special framework for MSME will be introduced
3. Recapitalize of PSU Bank
Further recapitizaltion of Rs200bn is proposed in FY22.
4. Deposit insurance cover
Deposit insurance cover was increased to Rs0.5mn – would be moving amendment to streamline the provisions to facilitate deposiors to access deposit insurance cover
5. Improve credit discipline
Minimum asset size of Rs1bn – invocation of SARFAISI limit reduced from Rs5mn to Rs2mn
6. Voluntary vehicle scrapping policy:
Objective is fuel efficient environment friendly vehicle
Vehicle will undergo fitness test after 20 years in case of personal vehicles and 15 years in case of commercial vehicles – not much stringent as expected for used vehicle financiers - Shriram Transport. Lower threshold would have led to lower potential pool and second hand pricing
7. Power sector – Revamped reforms scheme for discoms –
Revamped reform based scheme with outlay of Rs3.6tn for capex, smart metering, feeder separation etc. over years several efforts have been made to improve the strength of discoms.
Need to provide choice to customers to choose from more than 1 distribution companies – a framework to be put in place.
8. 217 projects worth over Rs 1 lakh crore completed under National Infrastructure Pipeline.
9. Professionally managed Development Financial Institution with Rs 27,000 crore capital.
10. Seven textile parks to come up in 3 years.
11. Rs 95,000 crore for roads development in Bengal.
12. Aim to complete 11,000 km of national highway infrastructure this year.
13. PLI scheme with outlay of Rs 1.97 lakh crore for 5 years starting this fiscal.
14. FM proposes sharp increase in capital expenditure for next fiscal at Rs 5.54 lakh cr, up from Rs 4.39 lakh cr of last year.
15. Rs 1.10 lakh crore outlay for railways, of which Rs 1.7 lakh crore is for capital expenditure. Railway to monetise dedicated freight corridors.
16. Centre to provide Rs 18,000 crore for public buses.
17. Pipelines of GAIL (India) Ltd, Indian Oil Corp, HPCL will be monetised.
18. Govt to provide Rs 2 lakh cr to states and autonomous bodies to meet capital expenditure.
19. Central fiscal funding for Kochi Metro, Chennai Metro, Bengaluru Metro, Nagpur Metro and Nashik Metro projects.
20. Rs 3.05 lakh crore outlay for power sector. Govt proposing to create a framework to give consumers alternatives to choose from more than one power distribution company.
Direct Tax:
1. Relief to senior citizen: for 75 years and above: Having only pension and interest income: exemption from filing ITR: Paying banks will do TDS
2. Reassessment: from 6 years to 3 years
Serious tax evasion cases: where evasion evidence is Rs.50lac or more then reopening within 10 years-
3. Dispute resolution committee: it will be faceless: anyone with total income less than 50 lacs and disputed income less than 10 Lacs can approach this committee
4. Faceless ITAT: faceless ITAT centre will be set where personal hearings will be conducted through VC
5. Tax Audits: digital transactions from 5 cr to 10 cr
6. Advance tax liability on dividend will arise only after declaration of dividend
7. Affordable housing 1.5 lac deduction will now be even available for loan taken till 31.3.2022
8. 80IBA: extended 31.3.2022
9. Tax incentive of affordable renting housing project
10. Pre filled income tax return will have pre filled data regarding Dividend, post office interest income, salary etc.
11. Trusts: educational and hospitals: limit increased from Rs.1 Cr to Rs. 5 crore (10(23C)
12. Late deposit of employee contribution of PF will now be not allowed as deduction.
Indirect Tax proposals in the budget:
1. Customs duty on stainless steel, copper, nylon, nafta, gold and silver reduced.
2. Custom duty on solar panels, auto parts, cotton, silk yarn increased.
3. Exemption on leather import withdrawn.
Agri Infra Development Cess on certain products