Vaccines, Taxes, Social Security & Small Business: How the 2021 Budget Affects You

Union Finance Minister Nirmala Sitharaman earlier today presented India’s 74th budget. This Budget aimed to lay down the vision for an Atmanirbhar Bharat or self-reliant India.

The Finance Minister said the Budget is based on six important pillars — health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India, reinvigorating human capital, innovation and R&D, and minimum government, maximum governance.

The Budget was presented in a record 162 minutes, and it is also the first time that it was presented in a paperless format. FM Sitharaman said that the government would infuse Rs 20,000 crore into public sector banks (PSBs) in FY22, to meet the regulatory norms.

Here are some of the highlights of the 2021-2022 Budget.

Taxes

• Senior citizens above the age of 75 will hereby be exempted from filing their income tax (IT) returns.
• Senior citizens above 75 years of age with only interest income or income from pension will not have to file income tax returns.
• There has been no change in the tax slabs this year.
• To ease filing of IT returns, details of capital gains and interest from banks, post offices, etc. will be pre-filled.
• The Union Budget reduced the time limit for reopening of income tax assessment cases to three years from six years. In serious tax evasion cases, where concealment of income is Rs 50 lakh or more, it would be 10 years.
• The tax holiday for startups, which was announced last year, will be extended for one more year until 31 March 2022.
• There is a Rs 1.5 lakh deduction on payment of interest for affordable housing which has been extended by one year.

Health

• For the health and wellness sector, the Budget has allocated Rs 2,83,846 lakh crore, which also includes Rs 35,000 crore for COVID-19 vaccines.
• Mission POSHAN 2.0, the government’s supplementary Nutrition Programme along with Swachh Bharat Mission 2.0 and Jal Jeevan Mission (Urban) to be launched.
• Seventeen health emergency centres and two mobile hospitals will be set up.
• FM Sitharaman said there has been a 137 per cent increase in the health budget this year.
• Pneumococcal vaccine distribution will be expanded to help save 50,000 lives every year.
• A sum of Rs 2,217 crores has been allocated for 42 urban centres with a million-plus population for clean air.
• This Budget also sets down allocation to set up health labs in all districts and 3,382 public block units in 11 states.
• Establishing critical care units in 602 districts and 12 government institutions has also been announced.
• A regional World Health Organisation (WHO) centre office, nine biosafety level III laboratories, and four regional National Institute of Virology will also be set up.

Small Business

• The definition of small companies was proposed to be revised by raising capital base to Rs 2 crore from the current limit of Rs 50 lakh.
• An asset reconstruction and management company will be set up for stressed assets of banks. FM Sitharaman also said the framework of the National Company Law Tribunal (NCLT) to be strengthened.
• The norms around the One Person Company (OPC) have been relaxed by reducing the residency limit of NRIs from 182 to 120 days. Earlier, only Indian resident citizens were allowed to form one person companies in India.

Social Security and Education

• A sum of Rs 1000 crore will be provided for the welfare of tea workers.
• For the first time, social security benefits will be extended to gig and platform workers.
• Women workers will now be allowed to work in night shifts across all sectors with adequate protection to be provided for the same.
• Late deposit of Employee Provident Fund (EPF) will not be allowed as deductions to employers.
• More than 15,000 schools to be strengthened under National Education Policy (NEP).
• Legislation to be implemented to aid the setting-up of the Higher Education Commission of India.
• A new central university to be set up in Leh.
• Also, 100 new Sainik Schools will be set up in partnership with Non-Government Organisations (NGOs), private schools, and states.

(Edited by Yoshita Rao)