As we come close to the second month of the most hopeful year that 2021 is, many speculations and anticipations are going over the industry for the Budget 2021. Our honorable Finance Minister shall present the Union Budget on February 01, 2021. This budget will be a historic one since this is the first budget post the Global Pandemic. With the end of Pandemic insight, the hopes are high for much-wanted reliefs and incentives.
On the occasion of the “Halwa Ceremony” held on Saturday, our FM launched the “Union Budget App” for hassle-free access to Budget Documents presented by Members of Parliament.
While the government announced various mini budgets in 2020 amidst the nationwide lockdown, Budget 2021 is also looked upon as an event that shall lift the economy. Here are our top 5 Expectations from the upcoming Budget 2021.
Expectation #01: Increase in Standard Deduction
Currently, the standard deduction available to salaried individuals is Rs. 50,000. During the CoVID-19 situation where the employees had to work from home, setting up an office like infrastructure was a costly affair. Hence, we expect to help salaried individuals get an increased take-home salary; an increased Standard Deduction must be announced. We also expect that the limits for investment under Section 80C shall be increased considering inflation’s impact.
Expectation #02: Simplified Exports at lowered Costs
“AatmaNirbhar Bharat.” A concept introduced by our honorable Prime Minister, Mr. Narendra Modi, amidst the global pandemic situation. This concept gave a boost to most of the sectors of the economy wherein the e-commerce sector has grown multi-folds. The volume of exports via this platform has increased significantly. However, the procedure for exports is quite lengthy and expensive. The importers and exporters must submit individual clearance documents for each package with the Indian Customs Department, which adds cost to the e-commerce traders.
Hence, we anticipate that the Bulk Clearance facility should be made available to ease up the process and make the same cost-effective.
Expectation #03: Increase in Duration for NPA Classification
Currently, nonpayment of the loan amount for more than 90 days is termed as a Non-Performing Asset (NPA). All the sectors were highly affected due to the Nationwide lockdown, and the businesses were almost stagnant for that period. Hence, it is anticipated that to ease the MSME sector’s pressure, the limit for classification of NPA shall be increased from 90 days to 120-180 days.
Expectation #04: List of Exemptions in the New Tax Regime to Broaden
As announced in the Union Budget for 2020-21 in February last year, the new tax regime did not pick up the way it was anticipated. Hence, it is expected to include certain deductions and exemptions such as Provident Fund, House Rent Allowance that were foregone earlier in this new regime.
Expectation #05: Reduction in Long Term Capital Gain Tax Rate
Currently, tax at the rate of 10% is applicable on long term capital gain above the threshold limit of Rs.1 lakh on gains from the redemption of equity and equity-oriented funds in a financial year with no benefit of indexation. This tax is an additional burden with other transaction taxes such as STT, Stamp Duty etc.
Thus, to boost investors’ confidence, it is anticipated that the government may consider reducing or removing the Long Term Capital Gain Tax.
There are various such expectations from the Historic Budget 2021, which is to be announced in less than 24 hours. Stay updated with the upcoming announcements on our blog site at LegalWiz.in