The 2021 budget has not provided any tax revenue to taxpayers. There are no changes to the lower tax rates or raised rates. And no further tax exemptions or deductions were introduced. The deduction rates for the salaried and pensioners also remains the same as before.
Union budget announcement overview
Finance Minister Nirmala Sitharaman, on February 1, announced a number of proposals for the benefit of investors, investors, and taxpayers. Sitharaman said the tax system should put less burden on taxpayers. She surprised taxpayers by not announcing any change in income tax rates.
She also did not announce a proposal to introduce the most popular Covid cess. Assistance in implementing the ITR has been provided to older citizens who are 75 years of age or older. The Union budget also has some good news for retired NRIs. FM Sitharman has proposed making the payment of benefits on REIT / InvIT released on TDS.
The finance minister has proposed to provide GST assistance by reducing the number of converted GST properties. The Minister of Finance has suggested that older citizens (over 75) who receive a pension and interest from a deposit will not be required to submit a Tax Return.
The government has proposed to allow tax exemptions on the maturity of the ULIP with an annual fee of up to Rs 2.5 lakh. EPF interest income in excess of Rs 2.5 lakh will be taxable. Interest income from PF donations in excess of Rs 2.5 lakh/year will now be taxable, according to the recommendations of Sitharaman's union budget.
Sitharaman had earlier promised to introduce a "Union budget like no other". The Minister of Finance was expected to provide assistance to the person affected by the disease and focus on economic recovery. Experts believe that the 2021 Union Budget could be the first place to collect fragments after the economic devastation caused by the COVID-19 and the lockdown that followed it.
Union budget 2021 income tax expectations
In last year's union budget, Finance Minister Nirmala Sitharaman introduced a new tax regime consisting of seven tax slabs - Nil, 5 percent, 10 percent, 15 percent, 20 percent, Percent 25, and 30 percent - compared to four tax buildings under the old tax regime.
Both of these tax systems will continue and will be taxed, according to Sitharaman's speech during the budget announcement.
Although the new tax administration has lower tax rates of between Rs 5 lakh to Rs 15 lakh, no tax exemptions and rebates will be available to the state, unlike the popular union budget tax expectations.
As a result, the taxpayer who is paid will lose the current benefits of more than Rs 5 lakh through exemptions and deductions available at various stages in the old tax regime when they switch to the new tax regime.
Union Budget at a Glance 2021-22 (Rs crore)
|Actuals 2019-20||Budgeted 2020-21||Revised 2020-21||Budgeted 2021-22||Change (Annualised)
(Actuals 2019-20 to BE 2021-22)
|Capital Expenditure of which:||3,35,726||4,12,085||4,39,163||5,54,236||29%|
|Capital Receipts of which:||68,620||2,24,967||46,497||1,88,000||66%|
|Recoveries of Loans||18,316||14,967||14,497||13,000||-16%|
|Other receipts (including disinvestments)||50,304||2,10,000||32,000||1,75,000||87%|
|Total Receipts (without borrowings)||17,52,679||22,45,893||16,01,650||19,76,424||6%|
|% of GDP||3.3%||2.7%||7.5%||5.1%|
|% of GDP||4.6%||3.5%||9.5%||6.8%|
|% of GDP||1.6%||0.4%||5.9%||3.1%|
Notes: Budgeted estimates (BE) refer to the budget allocations announced at the beginning of each financial year. Revised Estimates (RE) estimates projected amounts of receipts and expenditure until the end of a financial year. Actual amounts refer to audited accounts of expenditure and receipts in a year. The Change column represents the compounded annual growth rate (CAGR) for the period.
Sources: Union Budget at a Glance, Union Budget Documents 2021-22; PRS. (link)
Highlights of the union budget 2021
Prime Minister Narendra Modi praised the FM Union budget presented by Nirmala Sitharaman and called it a budget that reflects India's confidence.
Here are the highlights of this year's union budget:
Health and Sanitation
Economy and Finance
After acknowledging the Union budget 2021-22, it is safe to say the investment can be difficult for some, especially when viewed from a tax-exit perspective. Salaried professionals may find it hard to invest in provident funds with the introduction of new tax reforms.
However, other investment instruments like Unit-Linked Insurance Plans (ULIPs) remain safe from tax brackets in the union budget 2021 income tax announcements. A good ULIP can help you achieve your specific financial goals without compromising.
Investment avenues from Canara HSBC Life Insurance can help budding and experienced investors save money and build their finances.