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From real estate to metals, here's how the Budget affects key sectors

How the Budget affects key sectors of the economy

Topics
Budget 2021 | Indian Economy

Business Standard  |  New Delhi 

economy
Illustration by Binay Sinha

Real Estate & Infrastructure

What was expected?

  • Extension of sunset date for obtaining approval from competent authority in case of affordable housing projects
  • Enhancement of deduction of interest on funds borrowed for purchase of house property, including affordable housing

What was delivered?

  • Affordable housing projects eligible for tax holiday, now extended to cover projects approved till 31 March 2022. Benefit also extended to developers of affordable rental housing projects.
  • Loan sanction date extended to 31 March for additional interest deduc­tion for affordable residential house

Automotive

What was expected?

  • Incentivize vehicle scrappage policy
  • Increased focus and government spend on transport sector
  • Resolution of inverted duty structure for electric vehicle sector
  • Reduction of GST rates on vehicles for entry level vehicles

What was delivered?

  • Introduction of scrapping policy for old and unfit vehicles
  • Government to spend INR 18,000 crore to augment public bus transportation in India
  • Increase in BCD on specified auto parts

IT & Telecom

What was expected?

  • Clarity on applicability of withholding tax on cloud-based transactions
  • Favourable policies for creating digital infrastructure and ecosystem
  • Incentives for research and development of next-gen technologies

What was delivered?

  • Withholding tax @ 0.1% on purchase of goods in excess of 50 lacs
  • To incentivise digital transaction, limit for tax audit for persons with 95% digital transactions increased from 5 crore to 10 crore

Financial Services

What was expected?

  • Increase in FDI in insurance sector
  • Divestment of government stake in PSBs
  • Tax rationalisation for foreign bank branches to ensure a level-playing field

What was delivered?

  • FDI limit in Insurance sector increased from 49% to 74%
  • Privatization of 2 PSBs and 1 General Insurance company has been proposed in addition to capital infusion of 20,000 crores in PSBs
  • Relaxed 'Demerger' provisions for PSUs

Metals

What was expected?

  • Reduction in customs duties for Gems and Jewellery
  • Reduction in customs duties on metals & elimination of GST compensation cess on coal
  • Review of anti-dumping for various steel products

What was delivered?

  • Reduction in BCD on gold silver to 7.5%
  • Reduction in BCD on specified iron, steel & copper items
  • Temporary revocation of anti-dumping duties for specified steel items


Disclaimer: The data have been provided by EY. Neither EY nor Business Standard is liable for any action taken on the basis of this data

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First Published: Mon, February 01 2021. 23:51 IST
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