Union Budget 2021 on February 1: Here are key expectations
What's the story
As India hopes to recover from the COVID-19-induced economic crisis, all eyes are now on the Union Budget for the upcoming financial year. The Union Budget 2021 will be presented by Finance Minister Nirmala Sitharaman on February 1, 2021, and the Centre has already started consulting stakeholders and industry experts ahead of the budget announcement. Here are some key expectations from Union Budget 2021.
SGB scheme
Amending Section-47 with reference to sovereign gold bonds scheme
One expectation from the 2021 Budget is that capital gain provisions shouldn't contain any particular year's reference with regards to sovereign gold bonds (SGB) scheme. Under the Income-Tax Act's Section-47, SGB transfers by way of redemption shouldn't be considered as transfers for capital gain purposes. However, this applies only to SGB Scheme, 2015, and Section-47 should be amended to remove any particular year's reference.
Details
Tax deducted in foreign countries to be considered assessee's income
Another expectation is that Section-198 should be amended to treat income earned in foreign countries at par with income earned in India. Under Section-198, tax deducted at source should be included in one's gross total income. But income computation gets disputed if taxes were withheld outside India and corresponding income is offered to tax in India, while the assessing officer assesses the gross income.
Information
Further consolidation of the public sector banks
Another major expectation from the 2021 Budget is to further reduce the number of public sector banks in the country from the existing 12 to just four through mergers. The number had already been reduced from 27 to 12 by merging several public sector banks.
About
Consequential amendment needed after abolition of Dividend Distribution Tax
Under Section-234C, interest is charged if an assessee is liable for advance tax but fails to pay/pays less than required. However, under Section-115BBDA, payment shortfalls should be ignored if they are due to wrong estimation/under-estimation of dividend income. Thus, amendments to Section-234C are expected to provide relaxation from levy of interest if there's shortfall in one's advance tax payment because of the aforementioned reasons.
On 2021 Budget
A Budget like never before: Sitharaman
Sitharaman earlier promised a "Budget like never before," indicating that the Centre would take all necessary steps to boost the economy badly hit by the pandemic. "Send me your inputs so that we can see a Budget, which is a Budget like never before, in a way. 100 years of India wouldn't have seen a Budget being made post-pandemic like this," she had said.
Quote
'We will be a significant contributor to global economic revival'
"Considering our size, population, and potential that India hold for good growth and building of economy, I wouldn't hesitate...to say that we shall be the engine of global growth along with...few other countries. We will be a significant contributor to global economic revival," Sitharaman said.