The two most relevant points in budget for personal investments are
Interest income from contribution to PF above ₹2.5Lakhs being subjected to Tax and Cash Allowance in lieu of LTC being tax exempted.
Only a premium of up to ₹2.5Lakhs in ULIP’s exempted from Tax.
Other Key highlights of the Budget are
Healthcare Expenditure saw a massive jump of 137% to ₹2.23 lakh crores.
Infrastructure An outlay of ₹5.54 lakh crores, 34.5% more than the budget estimate for FY2020-21.
Fiscal Deficit For the current FY is being pegged at 9.5% of the GDP and for the FY2021-22 the deficit is being estimated at 6.8% of the GDP.
Banking Asset Reconstruction Company Ltd To be set up to consolidate and take over the existing stressed debt and dispose off the assets to Alternate Investment Funds (AIFs) and other potential investors for eventual value realization.
- Interest earned on PF contributions above ₹2.5 lakh per annum to become taxable
Citizens of age 75 years and above having only Pension and Interest income exempted from filing of IT Returns.
- Pre-Filled Returns Details of Capital gains, Dividend Income and Interest income will be pre-filled in the returns
- ULIPs Tax exemption allowed only for maturity proceeds of ULIP having annual premium of up to ₹2.5 Lakhs
- Reopening of Assessment reduced to 3 years from 6 years.
Constitution of Faceless Dispute Resolution Panel for people with Total Income upto Rs.50 lakh and disputed income of ₹10 lakh.
- Tax audit limit to be increased to ₹10 crores from ₹5 crores for those having less than 5% cash transactions
Dividend Tax Dividends will be exempt from TDS. Advance tax liability on dividend income will arise only after declaration or payment of dividend.
- The affordable housing additional deduction extended till 31 Mar 22
- Vivad Se Viswas Scheme last date of filing extended to 28 Feb 21
- The tax holiday for startups has been extended by one more year up to 31 Mar 22
For further details on implications of budget on your savings and why, when, where and why to Invest
and the emerging Investment Opportunities.
Be Smart and Invest Smartly!!