The new monetary year has began From April 1, 2021, and with it, guidelines and announcements produced by Finance Minister Nirmala Sitaraman in the Union Budget 2021-22 have come into impact. Given under are the important announcements, dividend payment to REIT/InvIT exempt from TDS to privatisation of two public sector banks to new highway projects in poll-bound states. Moreover, on the tax front, revenue tax guidelines on TDS and new provident fund tax guidelines have currently come into impact in the new monetary year 2021-22 (FY22).
Key Union Budget 2021 announcements
PF tax guidelines: FM had proposed that the interest earned on an employee’s contribution above Rs 2.5 lakh in a fiscal will come to be taxable in the hands of the employee. But, from April 1, 2021, the interest revenue earned on contributions above Rs 2.5 lakh per fiscal will be taxable in accordance with one’s tax slab.
TDS (Tax Deducted at Source): FM proposed a larger TDS (tax deducted at supply) or TCS (tax collected at supply) in order to make more men and women file their revenue tax returns (ITRs). The insertion of two new sections — Sections 206AB and 206CCA — have been proposed through the Budget 2021 as a specific provision for deduction of larger TDS and TCS from these not filing ITR.
Dividend payment to REIT/InvIT exempt from TDS: In order to attract more investment in true estate and infrastructure sectors, FM Sitharaman announced the debt financing of InVITs and REITs by foreign portfolio investors (FPIs). Moreover, the government announced that dividend payments to REITs and InVITs would be exempt from Tax Deduction at Source (TDS).
Disinvestment and strategic sale: The strategic divestment of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam restricted amongst other individuals would be completed in 2021-22. For the monetary year 2021-22, FM Nirmala Sithraman had announced a disinvestment target of Rs 1.75 lakh crore.
Privatisation of 2 PSUs: FM Sitharaman announced the privatisation of two public sector banks and one basic insurance coverage business as portion of a disinvestment strategy to create Rs 1.75 lakh crore. The minister also informed that in 2021-22, the government would also bring the IPO of LIC.
New highway projects for poll-bound states: Sitharaman announced the National Highways projects for poll-bound states — Rs 1.03 lakh crore for 3,500 km in Tamil Nadu, Rs 65, 000 crore for 1,one hundred km in Kerala, Rs 25,000 crore for 675 km in West Bengal, and Rs 34,000 crore for 1,300 km in Assam.