PERSONAL TAX: MOSTLY PROCEDURAL RELIEF PROPOSED FOR FY22

A revenue constrained Union Budget 2021-22 did not offer much to personal taxpayers, with mostly procedural relief rather than an exemption cushion proposed.

The proposals presented to Parliament by Finance Minister Nirmala Sitharaman exempted senior citizens of 75 years and above, who are dependent on pension and interest income from filing income tax returns. However, the paying bank will deduct the necessary tax on their income.

Besides, the dividend payments to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) from tax deduction at source (TDS) have been exempted.

An additional deduction of Rs 1.5 lakh has also been proposed on availing loans for affordable housing taken up till March 31, 2022.

Furthermore, the Finance Minister proposed to relax certain conditions which prohibited private funding, restriction on commercial activities, and direct investment in infrastructure to attract foreign sovereign wealth and pension funds to invest in domestic infra projects.

In addition, Sitharaman proposed to give relief to those Non-Resident Indians who have returned to India but face hardship of double taxation.

Apart from exemptions, the budget envisages constitution of a Dispute Resolution Committee for small taxpayers.

The time limit for reopening of income tax assessment is also set to reduce, while pre-filling of returns will cover capital gains from listed securities and dividend income.

Economic experts, howver, believe that it is a very balanced and development-oriented Budget.

They said that this Budget will strengthen the economy of the country which has been derailed due to the Covid-19 pandemic. It will also give a boost to small industries and start-ups, along with the automobile and textile sectors.

The experts said that the most important thing is that through this Budget, the government has made a concerted effort to take the country on the path of progress, while not trying to please any particular region or class.

On the other hand, the people associated with the industry said that the Budget as a whole is quite impressive.