Introduction:
The development of any nation depends upon the economic policies and growth of the country. The same is true for India, which is one of the fastest-growing economies in the world. The Union Budget is an essential document that outlines the economic policies of the country. Recently, the budget presented by the government had a significant impact on the legal system of India. As a law firm named NRI Legal Services, it is our responsibility to understand and analyze the legal issues that may arise due to the budget.
Impact on Legal System:
The Union Budget has a direct impact on the legal system of the country. One of the significant impacts is related to the increase in the budget allocated to the judiciary. The budgetary allocation for FY 2021-22 has been increased by 18% to INR 2,255 crore. This increase in budget would lead to better infrastructure for the judiciary, such as the availability of computers, internet, and other necessary equipment which would help the court process run more smoothly.
Another issue is the proposed changes to the Finance Act, 2021, which aims to simplify tax compliance and reforms. The government has proposed e-assessment provisions for tax scrutiny. The move is a significant change from the existing system, where the scrutiny is done on a face to face basis. The new system is expected to save significant time and reduce corruption cases in the assessment of taxes.
The budget also proposes to increase the threshold monetary limit for appeals by revenue authorities in appellate tribunals. The limit has been increased from INR 20 lakh to INR 50 lakh. This increase will help reduce pendency in tax litigation and provide relief to taxpayers, who have been waiting for years for their cases to be resolved.
There are also other related legal issues that deal with the enhancement of digital transactions in India. The budget has proposed several measures to enhance the digitization of transactions, such as the inclusion of senior citizens and pensioners in the tax exemption ambit, which will allow them to use the Aarogya Setu application to pay for transactions.
The budget also proposed that NRIs can now set up One Person Companies in India. This move would help NRIs start their businesses in India, which would impact the country's economic growth. However, legal issues related to the incorporation of such a company, such as an understanding of legal formalities related to the registration process, should be kept in mind.
Apart from these, the budget has proposed various provisions related to laws in India. For example, the budget aimed at the development of the infrastructure sector, which would impact the legal framework related to the sector. It proposed setting up of an Asset Reconstruction Company (ARC)-Asset Management Company (AMC) structure to manage stressed loans that would impact the Insolvency and Bankruptcy Code in India.
Conclusion:
To conclude, the Union Budget 2021-22 has proposed several measures that would impact the legal system in India. The focus on digitization, ease of doing business, and reduction in tax litigations are some of the significant impacts of the budget. As a law firm named NRI Legal Services, it is essential to understand and analyze these legal issues and provide our clients with the best legal solutions. The analysis of these issues would ensure that we are updated with the latest legal developments in India and provide our clients with the best legal assistance.
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