Hi, it is budget 2021, we are summarizing the budget key highlights, which might affect a few of us. So for simplicity, orange color denotes no benefit and blue color denotes the benefit to us:-
No Change in Tax Slab Rate
No Change in Deduction U/s 80C, 80D
Small Company Definition Changed
There are certain benefits in terms of reduced compliance, that are enjoyed by a small company.
Earlier Small company means a company having capital and turnover less than 50 lakhs and 2 crores, respectively
Now, this limit has been raised to 2 crores and 20 crores, for capital and turnover, respectively.
The residency limit is reduced in terms of the number of days
Please understand that this limit is reduced only for the purpose formation of OPCs.
The limit was for 182 days now it is reduced to 120 days
Exemption from filing ITR, for Senior Citizens, aged above 75 Years
The Senior Citizens, who are aged above 75 years, are now exempted from filing the income tax return, provided the income is there only from Pension and Interest, and TDS is deducted by the Bank.
Time Limit for re-opening of Case
Earlier it was 6 years and now it is reduced to 3 years. However serious tax evasion cases may be re-opened up to 10 years, provided the approval of the Principal Chief Commissioner is taken
Dispute Resolution Committee
One committee will be set up for small taxpayers to settle the disputes
Income Tax Appellate Tribunal will be made Faceless
Relaxation in Taxation for Non-Resident Indians with respect to Foreign retirement accounts
Audit Limit of 5 crores is now updated to 10 crore
It will be no help practically to the tax payers
Relief in payment of Advance Tax with respect to Dividend Income, now the advance tax needed to be paid after the declaration/payment of the dividend
Pre-filled Income Tax Return Forms
Now the ITR forms will be pre-filled for the below incomes
Capital gain on listed security, (both long term and short term)
Interest income from banks
Conclusion: There is a huge need for funds to the Govt to manage the growth of the economy. And this is the reason that there is no benefit for small taxpayers, be it is a small business, salary income, rental income, and so on. Moreover, it is clearly evident that Govt is keeping an eye on all your transactions, this is how pre-filling of ITR forms is achieved.