1. FDI in Insurance sector – increase the permissible FDI limit from 49% to 74% in insurance companies and allow foreign ownership and control with safeguards. The majority of directors on the board and key management persons (KMP) would be resident Indians with at least 50% of directors being independent directors.


  1. Reduction in time for Income Tax Assessment – The time limit to reopening the assessment reduced to 3 years from the erstwhile 6years. Further the tax evasion cases where there is an evidence of concealment of income more than INR 50 lac can be re-opened up to a period of 10 years after approval of Principal Commissioner of Income Tax (PCIT).
  2. Setting up of Dispute Resolution Panel (DRP) for small taxpayers– In order to reduce litigation and provide relief to the tax payers the Vivad se Vishwas (VSV) scheme has already been implemented and  tax dispute of  INR 85,000 crores  has already been addressed under the VSV Scheme. Currently, Faceless DRP to be set-up , tax payers with a taxable income upto INR 50 lac and disputed income upto  INR 10 lac can approach this panel.
  3. Faceless Income Tax Appellate Tribunal (ITAT) to be set-up,  all matters and issues between the ITAT and  the Appellant to be conducted through video conferencing.
  4. The definition of the term “liable to tax” has been inserted in section 2 of the Income-tax Act, 1961. The term “liable to tax” in relation to a person means that there is a liability of tax on that person under the law of any country and will include a case where subsequent to imposition of such tax liability, an exemption has been provided.
  5. Incentive to start-ups – Eligibility to claim tax holiday to 31st March 2022.  Further, capital gains exemption for the outer date of transfer of residential property extended by another year to 31st March 2022.
  6. In relation to Non-Resident Indians (NRIs) – issues with respect to their accrued income in India, rules to be notified to remove the double taxation impact which would apply from 01 April 2022.
  7. Tax Audit limit increased  from current INR 5 crores to INR 10 crores in cases cash receipts or payments do not exceed 5% of total receipts / payments
  8. For ease of compliance to REITs and INVTs dividend payment are exempt from TDS.
  9. For the Foreign Portfolio Investors (FPI) TDS rates to be taken at lower treaty rates for dividend income.
  10. For ease of compliance, the Advance tax liability on dividend income only will arise on declaration or payment of dividend.
  11. The budget, proposes to make notified Infrastructure Debt Funds eligible to raise funds by way of tax efficient zero coupon bonds.
  12. To ease filing of Income tax returns, ITRs to have more pre-filled information on dividend, interest & capital gains to ease compliance.
  13. Affordable and rental housing projects can extend their tax holiday up-to 31 March 2022 and an additional interest deduction of INR1.5lac.
  14. In order to rationalize MAT provisions, it is proposed to align calculation of book profit for the purposes of MAT with the year of taxability of income agreed in APA or on account of secondary adjustment. Also it is proposed, both specified dividend income and the expense claimed are reduced and added back, while computing book profit in case of foreign companies where such income is taxed at lower than MAT rate due to DTAA.
  15. Equalisation levy provisions – In order to provide certainty, it has been clarified that transaction taxable under income-tax (i.e. any income which is chargeable to tax as royalty or fees for technical services in India under the Income-tax Act read with the agreement notified by the Central Government under section 90 or section 90A of the Income-tax Act) are not liable for equalisation levy. Further, it is also proposed to clarify regarding applicability of equalisation levy on physical/offline supply of goods and services.
  16. In order to incentivise the investment by the Sovereign Wealth Fund (SWF) of foreign governments in the priority sectors, there would be a 100% tax exemption to their interest, dividend and capital gains income in respect of investment made in infrastructure and other notified sectors before 31st March, 2024 and with a minimum lock-in period of 3 years.
  17. Rationalisation of the provision of presumptive taxation for professionals under section 44ADA – it has now been clarified that this section applies only to the resident individual, Hindu Undivided Family (HUF) or a partnership firm, other than LLP.
  18. Slump exchange – Proposes to amend the scope of definition of “Slump Sale” u/s. 2(42C) to include all types of transfers within its scope to provide certainty. It proposes that the transfer of one or more undertakings “by any means” would constitute ‘slump sale’ and explains the word “transfer” at par with Sec. 2(47) relying on SC rulings in Dhampur Sugar Mills and Artex Manufacturing to cover non-monetary consideration under ‘transfer’ which “in effect and substance” is in the nature of sale. The proposal effectively overrules the Bombay HC ruling in Bharat Bijlee where distinction was drawn between slump sale and slump exchange.
  19. Goodwill on depreciation – The budget furthermore proposes that no depreciation on goodwill to be allowed.
  20. Small charitable trusts running educational institutions and hospitals, there is a proposed increase the limit of annual receipts from  INR 1 crore to INR 5 crore
  21. Labour welfare- Late deposit of employees’ contribution not to be allowed as deduction to the employer.

International Financial Services Centre (IFSC)

  1. Section 9A specifying activities which do not constitute business connection in India to be amended to provide for exemption from clauses (to be specified by the government) to qualify as eligible investment fund and its eligible fund manager.
  2. Benefit of exemption on transfer of capital asset on recognised stock exchange in any IFSC where the consideration is in foreign exchange shall be extended to investment division of offshore banking unit to the extent attributable/ computed in prescribed manner.
  3. Amendment to the definition of ‘specified fund’ to include investment division of offshore banking unit which has been granted Cat III AIF registration and fulfils other conditions to be prescribed. Investment division of offshore banking unit is proposed to be defined as an investment division of a banking unit of a non-resident in an IFSC which has commenced operations prior to 31 March 2024.
  4. Income accrued/ arising/ received by non-resident on transfer of non-deliverable forward contracts entered into with an offshore banking unit of IFSC which commenced operations prior to 31 March 2024 and fulfils prescribed conditions shall be exempt.
  5. Income of a non-resident by way of royalty on account of lease of an aircraft by a unit in IFSC shall be exempt if the unit is eligible for deduction u/s 80LA and commenced operations prior to 31 March 2024.


Goods and Service Tax:

  1. Mandatory requirement of getting annual accounts audited and reconciliation statement submitted by a Chartered Accountant or a Cost Accountant is removed, annual return can be submitted a taxpayer with self-certified reconciliation statement.
  2. Supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa for consideration is included under the definition of ‘supply’ with retrospective effect from 1 July 2017
  3. No appeal shall be filed against the order issued by the proper officer detaining or seizing goods or conveyances in transit for payment of tax and penalty unless a sum equal to 25% of penalty has been paid by the appellant
  4. Input tax credit can be claimed only when invoices or debit notes are uploaded by the supplier in their GST returns.
  5. Supply to SEZ is considered as zero rated only when the said supply is for authorised operations within SEZ.
  6. Only notified class of taxpayers will be allowed make zero rated supplies with payment of tax.
  7. Provisions has been inserted in the Act to charge interest only on net tax liability payable in cash with effect from the 01 July 2017.


  1. 400 plus duty exemptions provided under Customs to be reviewed.
  2. Revised customs duty structure to be put in place effective from 01 October 2021.
  3. Imposition of Agriculture Infrastructure and Development Cess (AIDC) on specified imported and excisable goods (petrol and diesel) effective from 02 February 2021.
  4. Increase in customs duty on certain parts of automobiles, mobile phones and other electrical equipment.
  5. Rationalization of customs duty for metals, textile raw-material, gold and silver.
  6. Revoke of ADD and CVD on certain steel products.


  1. Announcement that de-criminalization under the Companies Act, 2013 is complete and now the decriminalization of LLP Act, 2008 will be undertaken.
  2. Definition of small companies: Companies with a paid-up capital not exceeding INR 2 Crores and a turnover not exceeding INR 20 crores are to be considered small companies. More than 2 Lac companies to benefit from this provision.
  3. For Start Ups and Innovators –  The Finance Minister has announced that One Person Company (OPC) can be incorporated without a limit for turnover or paid-up capital. Further, it has also been proposed that NRIs can now incorporate an OPC in India. The residency limit of NRIs have been reduced from 182 to 120 days.
  4. Proposal of a special framework for MSME.
  5. The Finance Minister also announced that MCA 21 v3.0 to be introduced with additional modules for e-scrutiny and e-adjudication.


Proposed amendments to SCRA

  1. Concept of ‘Pooled Investment Vehicle’ introduced which means any fund formed either as a trust or otherwise (such as MF, AIF, CIS or a business trust as defined under Income Tax Act, or any other fund regulated by SEBI.
  2. Such Pooled Investment Vehicle will be eligible to (i) borrow and issue debt securities as per SEBI regulations and also provide security interest to lenders subject to provisions of the trust deed.
  3. In case of any default by such Pooled Investment Vehicle, the lender can initiate proceedings against the trustee (who shall not be personally liable and his assets shall not be utilised for recovery of any such debt).

Proposed amendment to SEBI Act, 1992

  1. Restriction on sponsoring or carrying out an activity of an AIF or a business trust (either directly or indirectly) without obtaining a certificate of registration from SEBI.

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