HIGHLIGHTS:
- Finance Minister Nirmala Sitharaman is first woman to present budget 4th time in a row.
- She said increase taxes will not increase because of the hardship that people have been facing due to the pandemic.
- Reduction in import duties on different items has been announced.
What is in the News?
Everyone was eagerly waiting for the Union budget 2021-2022. People generally pay attention to what is inexpensive and what is expensive when it comes to budget. The budget has had little impact on costs since the implementation of GST, but this time the mobile and diamond import duties will be reduced, making some items more affordable. This is due to the fact that the budget mentions an increase or decrease in import duties. In such a circumstance, you’ll be wondering how big of an impact this budget will have on your wallet. So, let’s take a look on what was pricey in the budget and what got inexpensive?
The cost of mobile phones will decrease
To encourage indigenous production, Finance Minister Nirmala Sitharaman has announced a reduction in import duties on mobile phone charger transformers and mobile phone camera lenses. Mobile phones are projected to be inexpensive due to low-cost mobile parts.
Chemical Compounds and Steel Products
Import duties on methanol and a few other compounds have been reduced, in addition to chemicals essential for petroleum refining. Anti-dumping and countervailing duties (ADD and CVD) on specific steel products have also been announced to be eliminated. The import tariff exemption on steel scrap has been extended for one year to help MSMEs.
Diamond will be cheaper
The import duty on jewels containing cut and polished diamonds that has been decreased to 5% by the government. Import duties on cut and polished diamonds, as well as stones, are currently 7.5 percent. Simply Sond Diamond, on the other hand, will be free of import duty. Finance Minister Nirmala Sitharaman also stated that the government will make it easier to export jewellery via e-commerce.
The cost of an imported umbrella will increase
When it comes to products becoming more expensive, the government has raised the levy on umbrellas to 20%. Import duties on imitation jewellery have also been raised. It will cost at least Rs 400 per kilogramme to import. The goal is to cut down on imports.
Many products are unaffected by budget
There aren’t many things that can make a difference after announcement of budget. Actually, the GST currently determines the pricing of 90% of items, but the import duty effect remains on goods imported from overseas, as announced in the budget. As a result, budget announcements affect the pricing of items such as gasoline, diesel, LPG, CNG, and imported goods such as liquor, leather, gold, and silver, as well as electronic goods, mobile phones, chemicals, and vehicles. Only these are subject to increases or cuts in import duties by the government. Some people are subjected to excise taxes.
What is the definition of import duty?
Import duty is a tax placed on commodities brought into the country from another country. The amount of import duty levied is determined by the price of the items, as well as the country to which the goods belong, among other factors.
Custom duty, tariff, import tax, or import tariff are all terms used to describe import duty. Import tariff has two purposes: it raises revenue for the government and makes locally made items profitable on the market.
There is still a tax on earnings over 2.5 lakhs
This time, there has been no change in the tax structure. people having Rs 2.5 lakh of annual income will be considered as tax-free. If your income is between 2.5 to 5 lakhs, you will have to pay 5% tax on the difference between 5 lakhs and 2.5 lakhs, which is 2.5 lakhs. However, if you make use of Section 87A of the Income Tax Act, you can save tax on annual income up to Rs 5 lakh.
On income between 2.5 lakh and 5 lakh, the government pays a 5% income tax, although this tax is waived under section 87A of the Income Tax Act.This indicates that if a person’s yearly taxable income is less than Rs. 5 lakh, he does not have to pay income tax; however, if your income is more than Rs 5 lakh 10 thousand, you must pay tax on the slab of Rs 5.10 lakh – 2.5 lakh instead of paying tax for extra Rs. 10 thousand.
Digital currency was also included in this time’s budget, it was also mentioned to give exemption to startups. Tele health program will be started to improve mental health. Home loan can be expensive; in the same budget provides 47 thousand crore rupees in the defense budget for 2022-23.
