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AKGVG Budget Highlights

Preface

The Honorable Finance Minister Nirmala Sitharaman presented second budget amid the Corona pandemic which is her 4th budget in a row. This budget is crucial in all possible manner one can think of. The nation was severely hit by covid wave, yet the growth rate has been estimated @ 9.2% for this year and FINMIN assured that the country is in strong position to withstand challenges.
The budget seeks to lay down foundation and give blueprints of economy over Amrit Kaal for next 25 years. India to complete 75 years of independence this year and will see it gradually turning to 100 during this tenure.
The FINMIN spoke about the 3 goals of Amrit Kaal, i.e.

  • Focus on growth and all-inclusive welfare
  • Promotion of technology enabled development, energy transition and climate action.
  • Virtuous cycle starting from private investment, crowded in by public capital investment

This is based on synergy of the multi-model development structure through the 4 priority pillars namely:

  • PM GatiShakti
  • Inclusive development
  • Productivity Enhancement and Investment, Sunrise opportunities, Energy transition and climate action
  • Financing of Investments

Aside, the FM announced the successful strategic transfer of Air India, upcoming launch of LIC IPO and commencement of activities by National Bank for Financing Infrastructure and Development(NaBFID) and National Asset Reconstruction Company. Let us take a look at the sectoral highlights in the ensuing pages.

Sectorial Highlights

Agriculture and farmers’ welfare

  • Kisan Drone will be introduced for crop assessment, digitization of land records, spraying of insecticides, and nutrients
  • Agricultural universities will foster change of syllabi to meet the needs of natural, zero-budget and organic farming, modern-dayagriculture, value addition and management
  • Chemical free natural farming will be promoted
  • Estimated procurement of wheat and paddy in FY 2021-22 benefit 163 lakh farmers, and Rs.2.37 lakh crore direct payment of MSP value to their accounts
  • a rationalised and comprehensive scheme to increase domestic production of oilseeds and reduce imports
  • digital and hi-tech services to farmers with involvement of public sector research and extension institutions, a scheme in PPP mode will be launched
  • A fund with blended capital, raised under the co-investment model, will be facilitated through NABARD
Agriculture and farmers welfare

Social sector:

  • 80Lakhs home to be completed under PM in 2022-23
  • Har Ghar, Nal Se Jal will cover Rs. 60000Cr to cover 3.8 Cr households for tap water
  • Rs. 48000Cr allocated to housing projects under PM Awas Yojna
  • Rs. 1500Cr Allocated for development of northeastern states.
  • Aspirational Blocks Programme: For development of lagging blocks of aspirational districts
  • Vibrant Villages Programme: Targeting development of villages on the Northern Border left out from the development gains
Agriculture and farmers welfare

Education

  • PM e-vidya program will bring back the 2 years of school children
  • 200 TV channels to supplement the education of students of class I to XII in the regional language
  • Virtual labs and skilling e-labs to promote critical thinking skills and stimulated learning environment
  • Govt to bring Digital University
Rural sector

Health

  • National Digital Health Ecosystem will be rolled out under Ayushman Bharat Digital Mission
  • National Tele Mental Health Programme will be launched for quality counselling
  • Integrated architecture of health schemes through Mission Shakti, Mission Vatsalya, Saksham Anganwadi, and Poshan 2.0 to be launched
  • Two lakh Anganwadis to be upgraded to Saksham Anganwadis
Social sector

Infrastructure and Defence

  • PM Gatishakti to focus on seven engines of infrastructure, namely, Roads, Railways, Airports, Ports, Mass Transport, Waterways, and Logistics Infrastructure.
  • National highways to expand by 25000Kms in FY 2023 mobilizing Rs.22000Cr.
  • The data exchange among all mode operators be brought on Unified Logistics Interface Platform (ULIP) for just-in-time inventory management
  • Multimodal Logistics Parks at 4 locations through PPP mode will be awarded in 2022-23
  • Railways will develop new products and efficient logistics services for small farmers and Small and Medium Enterprises
  • Integration of Postal and Railways Network facilitating parcel movement
  • One Station-One Product’ will help local businesses & supply chains
  • As a part of Atmanirbhar Bharat, 2,000 km of network will bebrought under Kavach
  • 400 new generation Vande-Bharat trains to be introduced
  • One hundred PM GatiShakti Cargo Terminals for multimodal logistics facilities will be developed during the next three years.
  • Parvatmala: National Ropeways Development Programme will be taken up on PPP mode. Contracts for 8 ropeway projects for a length of 60 km will be awarded in 2022-23
  • Innovative ways of financing and faster implementation will be encouraged for building metro systems. Multimodal connectivity between mass urban transport and railwaystations will be facilitated on priority
  • Improvisation of civil structure
  • Implementation of the Ken Betwa Linking project at an estimated cost of Rs 44,605 crore to be taken up with irrigation benefits to 9 lakh hectare farmland, drinking water to 62 lakh people, 103 MW hydropower and 27 MW solar power generation
  • 5 more such projects under process of implementation
  • PM-DevINE: To fund infrastructure and social development based on felt needs of the North-East
Infrastructure

Banking

  • Digital Banking by Post Offices will see 100% of post offices to come on the core banking system
  • Scheduled Commercial Banks to set up 75 Digital Banking Units in 75 districts
msme

MSME incentives

  • Udyam, e-Shram, NCS and ASEEM portals will be interlinked and will perform as portals with live, organic databases, providing G2C, B2C and B2B services
  • Emergency Credit Line Guarantee Scheme (ECLGS) has provided additional credit to more than 130 lakh MSMEs
  • Raising and Accelerating MSME Performance (RAMP) programme will be rolled out
  • Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme will be revamped with required infusion of funds. This will facilitate additional credit of Rs. 2 lakh crores for Micro and Small Enterprises and expand employment opportunities
Miscellaneous

Miscellaneous

  • Issuance of e passport to be rolled out in 2022-23Introduction to central bank digital rupee
  • Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal) will be launched to promote online training
  • Start-ups will be promoted to facilitateDrone Shakti for Drone-As-A-Service
  • Green Bonds to mobilise resources for green infrastructure
  • Blended Finance for sunrise sectors
  • Measures to aid investment by Venture Capital and Private Equity Investment
  • Next phase of ease of doing business be launched
  • Green clearance portal be expanded to provide seamless authorizations
  • Special mobility zones for electric vehicles
  • 5G spectrum roll out is expected in 2022

Direct Taxation Highlights

  • Updated ITR can be filed within 2 years from the end of relevant assessment year by paying additional taxes to update omissions in ITRs filed.This can be done on a suo-moto basis rather than going through the present long procedure for adjudication.
  • AMT for Co-operative society reduced from 18% to 15% and surcharge reduced from 12% to 7% for the income bracket of INR 1 -10 crores.
  • Guardian/ parent of disabled/differently abled would be eligible for tax benefit with respect to lumpsum/ annuity towards insurance during the lifetime of disabled/ differently abled as well.
  • Benefit of deduction of employer’s contribution to NPS of 14% available to central government employees has been extended to state government employees from the existing rate of 10%.
  • To incentivize start-ups, new start-ups can get the benefits if they are incorporated upto 31st March 2023.
  • Concessional tax regime for newly incorporated manufacturing companies under section 115BAB extended to 31st March 2024.
  • Taxation of transfer of virtual digital assets specifically introduced @30% without providing any deduction other than cost of acquisition. Further, any loss would not be allowed to be set off against such income. TDS @1% would be applicable on such transactions. Gift of such assets to be taxed in the hands of recipients.
  • For effective litigation management, income tax department not to file fresh appeal in case of identical question of laws until the matter is decided by the jurisdictional High Court or Supreme Court.
  • Income to Non-resident Off-shore banking units/ IFSC from royalty, lease or ships, portfolio management, exempt from tax subject to certain conditions.
  • Rate of surcharge for consortium of companies taxed as Association of Persons (AOP) capped at 15% from existing rate of 37%.
  • Rate of surcharge for all types of long-term capital gains capped at surcharge of 15% from existing rate of 37%.
  • Clarification provided that any Surcharge, Health and Education Cess is not allowable as business expense.
  • Loss set-off against undisclosed income found in search operation would not be allowed.
  • Benefits passed on to agents by businesses to be brought in the ambit of TDS provisions for aggregate benefits exceeding INR 20,000 during the year.

Indirect Taxation Highlights

  • Gross GST collection 140,986 crore in Jan 2022, highest since GST introduced despite covid.
  • Customs administration to be fully IT driven in SEZs using risk-based check by 30th September 2022.
  • Concessional rates in capital goods and project imports gradually to be phased out and a moderate tariff of 7.5% to be applicable.
  • Customs exemptions and tariff simplification to be reviewed.
  • Concessional rates will be incorporated in the Act rather introduction through notifications.
  • To facilitate domestic electronicsmanufacturing, customs duty rates are being calibrated to provide agraded rate structure.
  • Exemptions on implements and toolsfor agri sector manufactured in India to be rationalized.
  • Customs duty exemption to be extended to steel scrap.
  • Duty on certain inputs required for shrimpaquaculture to be reduced.
  • Additional differentialexcise duty will be applicable on unblended fuel @ Rs.2 per liter w.e.f. 1st October 2022.
  • Exemption to beprovided to simply sawn diamonds. Customs on polished diamonds, gemstones reduced to 5%. Simplified regulations proposed to facilitate export of jewellery through e-commerce.
  • No specific provisions on GST, highlighted in the budget speech.
We trust you will find this journal informative as well as useful.
For any queries, you can write to us at "info@akgvg.com".

Disclaimer: The entire contents of this journal have been prepared on the basis of relevant provisions and information existing at the time of preparation. The observations of the author are personal view and the author does not take any responsibility of the same and this cannot be quoted without the written consent of the author.

Best Regards!
Knowledge Updates Team
AKGVG & Associates
(Chartered Accountants)

DELHI | GURGAON | MUMBAI | AHMEDABAD | BANGALORE | CHENNAI | LUCKNOW

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