The both houses of the Parliament has passed the “Finance Bill 2021” on 23rd March 2021. The Finance Bill seeks to bring financial proposals of central government in effect for the financial year 2021-2022.
The Finance Bill for 2021 was passed by lok sabha with several amendments. It proposes for some changes in proposals which were made in union budget 2021 with the objective of boosting the ease of doing business and easing compliance burden.
Finance Bill 2021-22
The Finance Bill for 2021 provides ten year income-tax exemption to National Bank in order to Finance the Infrastructure and Development. It also provides for five year tax exemption to the private sector development finance institutions. The exemption is extendable to another 5-years. Finance Bill amends the Finance Act, Income Tax Act of 1961; Securities Contracts (Regulation) Act of 1956; Central Sales Tax Act of 1956; Life Insurance Corporation Act of 1956 and SEBI Act of 1992. According to the Finance bill, senior citizens who gets pension and interest income have exempted from filing tax returns. However, no changes have been made in the income tax rate.
New provisions to the Income Tax Act of 1961
The new provision will discourage the practice of not filing returns by ‘specified person’ whose case has been deducted or collected. Further, person in whose case TDS/TCS of Rupees 50,000 has been made for past 2-years and who has defaulted in filing return of income then the rate TDS/TCS will be deducted at higher rates.
Limited liability partnership Act of 2008
FM Nirmala Sitharaman, also proposed to take up decriminalisation of Limited Liability Partnership (LLP) Act, 2008 on the lines of decriminalisation of procedural and technical compoundable offences under Companies Act of 2013.
Small Companies definition
Nirmala Sitharaman also proposed to revise definition of small companies under Companies Act of 2013 for the small Companies by increasing their thresholds of Paid-up capital. Threshold has been increased from “not exceeding Rupees 50 lakh” to “not exceeding Rupees 2 crore”.
Parliament passes Finance Bill for 2021 Parliament passes Finance Bill for 2021