Union Budget 2021 - No news is good news

pokerbob

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With the budget 2021 done and dusted, looks like we can start focusing on the year ahead. Few changes made to tax laws. However, big news is obviously that there is no new tax or cess.

Definitely a situation of no news is good news here.

We know you’ve received Whatsapp forwards from a million places with budget highlights (a PDF document between 30-200 pages). We also know you haven’t even bothered opening half of them.

Here’s what we propose - don’t bother reading our budget highlights either. Look at the main headings, if it’s relevant to you - go ahead and read it. Otherwise, skip!

Instead of quoting sections and throwing numbers at you, we’ve decided to keep it simple so that everyone can understand the changes made to tax laws, company laws and GST.

We’ve also stayed away from quoting budget numbers. We know the human mind can’t tell the difference between INR 100 crore and INR 100,000 crore (We can’t tell the difference either – they just seem like very big numbers).

Use this as a handy reference document or use it to show-off your knowledge to your friends and family!

Happy reading!

Read here: https://www.thegalacticadvisors.com/post/union-budget-2021

What's covered in our Budget Highlights?

A. Income Tax
  1. Unit Linked Insurance Plan - Investing large amounts in a ULIP? This will now be taxable
  2. Employee’s Provident Fund - More pain for the high salaried individual
  3. 401K, IRA & Retirement accounts - Finally. New rules to be notified for Retirement accounts
  4. Leave Travel Concession - LTC Cash scheme finally given legal backing
  5. Update to Section 44ADA - This one’s big. A change to the Mythical Section 44ADA
  6. Tax Audit only above 10 crore - Earlier limit of INR 5 crore increased to INR 10 crore
  7. Stamp Duty value can be 120% of Property Value - Deeming provisions will not apply on certain Residential Property
  8. Extension for Startups - Time limits extended by 1 more year to 31 March 2022
  9. Affordable housing loan - Time limits extended by 1 more year to 31 March 2022
  10. Revision of ITR due dates
  11. Relief for Senior Citizens - No need to file ITR
  12. TDS on Purchase of Goods - Purchase of goods greater than INR 50 lakh in a year
  13. Double TDS for non-filers - Be prepared for double tax in case of non-filing of ITR
  14. Assessment reopening - Time limits reduced to reduce burden on tax payers
  15. Honouring the Honest
B. Company Law
  1. Small Company and One Person Company - Relaxation for Small Companies
  2. Small Company and One Person Company - Amendments for One Person Companies
  3. Decriminalization of Offences under LLP Act
  4. NCLT, MCA and FDI - Rationalization of Tribunals and E-courts systems.
  5. NCLT, MCA and FDI - Launch of MCA Version 3.0
  6. NCLT, MCA and FDI - Increase in FDI limit in Insurance
C. GST
  1. GST Audit and Self Certification - GST Audit requirement removed
  2. GST Audit and Self Certification - Self-Certification of annual returns
  3. GST Updates
  4. Extension of Power and Penalties
 
@houstonpatty In order to look up more on the epf tax, I googled and found this to be the reasoning of govt.

A government study ahead of the budget found that about 123,000 people had a combined Employees Provident Fund (EPF) corpus of ₹62,500 crore in FY19. This prompted the government to remove the tax exemption on annual contributions of ₹2.5 lakh and above to provident fund accounts in the February 1 budget. The EPF has 63.3 million contributing members.

“One of the highest contributors has more than ₹103 crore in his PF account, followed by two second highest ones having more than ₹86 crore each,” said a government official.

“Top 20 HNIs (high net worth individuals) have about ₹825 crore in their accounts, while top 100 HNI contributors have more than ₹2,000 crore,” the official added.
 
@resjudicata This explains the why to tax. But this doesn't explain the 2.5 lakh limit. I think EPF+VPF was a good tool to generate retirement corpus for middle class folks, and 2.5 lakh PA seems to be too less. May be 5 lakhs per annum be better ?
 

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