A person who earns an income in India is subjected to “Income tax”. (Either it is a resident or non-resident of the country India). Your income can be in the form of salary or pension or can be in form of savings account total accumulating of 4% interest.

Basics of Income-tax

The income tax department breaks the income sources down into the below mentioned 5 categories-

• Income from the salary

• Income from the salary or the pension is covered under here

• Income from other sources

• Income from bank account interests, fixed deposits

• Income from house property

• This is mostly rental income

• Income from Capital Gains

• Income from the sale of a capital asset like mutual funds or shares or house properties

• Income from business and profession

• When you are self-employed or work as a freelancer or contractor or you run a business. Even life insurance agents or chartered accountants or doctors and lawyers who have their own practice or tuition teachers

The “Taxpayers”:

For the purposes of income tax includes the following:

• Individuals/ Hindu undivided family or HUF/ Associations of Person or AOP/ Body of Individuals or BOI

• The Firms

• The Companies

• Income earners (up to 2.5 lakhs)

• Income earners (between 2.5- 5 lakhs)

• Income earners (between 5-10 lakhs)

• People earning more than 10 lakhs

01.02.2021: The Union Budget day updates

Finance Minister of India, Nirmala Sitharaman ma’am has told about a significant increase in the category of capital expenditure. It is set for the next fiscal at the amount of Rs 5.54 lakh crore i.e. up from Rs 4.39 lakh crore of the last year 2020. In the Union Budget of 2021 speech, she has announced that the Foreign Direct Investment or FDI for the insurance sectors to get an increase from 49% to 74%. She has also proposed a further infusion of Rs 20,000 crore for public sector banks. In her Union Budget 2021 speech, she said that the Government will set-up a faceless dispute resolution mechanism for the small taxpayers. For this purpose, the Central Government proposes to decrease the time allowed to re-open the tax investigation up to 3 years vs 6 years. The Pensioners who are aged more than 75 years do not require to file Income Tax Returns according to her. Partner and Head of the Financial Risk Management, KPMG in India Mr. Rajosik Banerjee said, "To address the concerns around asset quality, credit loss and liquidity stress, Budget 2021 has been proactive to infuse additional capital of Rs 20,000 crore to PSU Banks for providing continued credit access to wholesale and retail borrowers, and therefore push growth agenda. "According to the Finance Minister the forthcoming census would be the first digital census in the history of our country, India. She has allocated the amount Rs 3,768 crores in the year of 2021-22. This year’s union budget is going to directly impact on the share market is already visible as the Sensex focuses over 1100 points and the Nifty touches above 13,850. 

Tapati Ghose, Partner, Deloitte India proposed about the NRI taxation and further fillip to the NRIs. Talking about the return to our country: India is a very challenging issue that is commonly faced by the NRIs. The faces “W.R.T. Tax” for their accumulated income over time in the foreign retirement accounts in terms of the tax credit for their foreign taxes. This can arise on account of the differential tax years. These are specific rules for the NRI that will be further notified in order to remove the hardship of the double taxation. M&A perspective Tax (e-Commerce and Consumer sector) - Amit Agarwal and Chirag, said that no COVID-19 tax is something demonstrating the Indian government's ability to take the salient risk. The increased layout of the infrastructure, CAPEX, healthcare, and boosting to overall credit flow for the business. It will be done by weeding out the toxic assets of the banking system and being key positives that should spur up the GDP growth rate. It is a deal-making activity as a whole. The proposal has given a huge disinvestment target and potential increase for the government’s borrowings being likely to exert pressure on the interest rates. Overall we can say that a great risk is taken at that point of time when the governments across the world are trying to support their economies in such a way that is never seen before the stimulus.