New Delhi: Union Minister for Finance and Corporate Affairs presented the Union Budget for the year 2021-22 on Monday (February 1) in the lower house of the parliament. The Finance Minister proposed to extend the eligibility period for a claim of the additional deduction for the interest of Rs. 1.5 lakh paid for a loan taken for the purchase of an affordable house to 31st March 2022.
In order to increase the supply of affordable houses, she also announced the extension of the eligibility period for claiming tax holiday for affordable housing projects by one more year to 31st March 2022.
For promoting the supply of affordable rental housing for the migrant workers, the Minister announced a new tax exemption for the notified affordable rental housing projects.
The Budget seeks to reduce the compliance burden on senior citizens who are of 75 years of age and above. Such senior citizens having an only pension and interest income will be exempted from filing their income tax return. The paying Bank will deduct the necessary tax on their income.
The Budget proposes to notify rules for removing the hardship of non-Resident Indians returning to India on the issue of their accrued incomes in their foreign retirement account. The Budget proposes to make a dividend payment to REIT/InvIT exempt from TDS. For Foreign Portfolio Investors, the Budget proposes deduction of tax on dividend income at lower treaty rate. The Budget provides that advanced tax liability on dividend income shall arise only after the declaration or payment of dividend.
The Minister said that this was being done as the amount of dividend income cannot be estimated correctly by the shareholders for paying advance tax.
Finance Minister Nirmala Sitharaman, in her Budget speech, said that post-pandemic, a new world order seems to be emerging and India will have a leading role therein. She said in this scenario, our tax system has to be transparent, efficient and should promote investment and employment in the country.
The Minister said that at the same time, it should put the minimum burden on our taxpayers. She said that a series of reforms had been introduced by the Government for the benefit of taxpayers and economy, including slashing of the corporate tax rate, the abolition of dividend distribution tax, and increasing of rebate for small taxpayers. In the year 2020, the income tax return filers saw a dramatic increase to 6.48 crore from 3.31 crore in 2014.
