Economic Survey 2021-22: Highlights from Tax and Corporate Laws perspective

The Finance Minister Smt. Nirmala Sitharaman has tabled the Economic Survey 2021-22 in Parliament on 31-01-2022. For the second year straight, the Economic Survey was prepared under a cloud of the Covid-19 pandemic.

The Economic Survey 2021-22 explains India’s economic response to the Covid-19 shock. Advance estimates suggest that the Indian economy is expected to witness a real GDP expansion of 9.2% in 2021-22 after contracting in 2020-21. Agriculture and allied sectors have been impacted least by the pandemic, and the sector is expected to grow by 3.9% in 2021-22 after growing 3.6% in the previous year.

The key discussions relating to Direct Tax, Indirect Tax, Banking, Primary Capital Markets and IBC Laws highlighted in the Economic Survey are as under:

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Income Tax

1) The personal income tax has grown at 47.2% over April-November 2020 and 29.2% over April-November 2019.

2) The corporate income tax registered a growth of 90.4% over April-November 2020 and 22.5% over April-November 2019.

3) More than 2 lakh cases were allocated under the Faceless Assessment Scheme, of which 1.99 lakhs was completed without any interaction with the taxpayer.

4) Around 11.20 lakh notices have been issued in a faceless manner, and responses have been received in more than 6.93 lakh cases (as of 16-11-2021).

5) About 88% of the appeals are handled under the Faceless Appeals mechanism. E-verification and digital signature is not needed if documents are filed through an e-filing account in faceless assessment proceedings.

6) A comprehensive study of the Income-tax Act and Rules was undertaken to identify the compliances that can be reduced. Out of a total of 271, 74 compliances have been reduced. Out of the remaining 197 compliances, 152 are online, and 45 are offline. Out of these 45 offline compliances, 42 compliances will be made online. Three compliances will be manual due to the non-availability of PAN in some instances.

7) To encourage foreign investments of Sovereign Wealth Funds and Pension Funds, since January 2021, nine Sovereign Wealth Funds and 14 Pension Funds have been notified for Income-tax exemption.

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