On 1 February 2021, the Finance Minister presented the Union Budget 2021-22 containing following tax proposals.

• The budget proposed to reduces the length of time for assessment procedures from 24 months to 21 months (measured from the end of the assessment year). Consequently, the period of time for completing transfer pricing assessment proceedings would also be reduced from 22 months to 19 months.
• The taxpayer could apply to the auditor to recalculate book profits from previous years if book profits from a previous year increase due to an adjustment made pursuant to an advance pricing agreement (APA) or if there is a secondary adjustment.
• The due-date for filing the return of income of its partners would be extended to 30 November of the assessment year, in situations of a partnership required to furnish an accountant’s report (Form 3CEB).

• The tax holiday for eligible start-ups would be extended to include start-ups incorporated on or before 31 March 2022.
• The tax holiday for investment in affordable housing projects would be extended to those approved by 31 March 2022, and the scope of the tax holiday would be expanded to cover affordable rental housing projects.
• The budget proposed to increase the turnover threshold for selecting tax audits from INR 50 million for taxpayers carrying on a business to INR 100 million where cash transactions represent less than 5% of turnover.
• It is proposed to shorten the deadline for completing the tax audit process to 9 months (compared to the current 12 months) from the end of the relevant assessment year in which income the income was first assessable (i.e., 21 months from the end of the tax year).
• The time limit for conducting a tax re-audit proceeding is reduced to 3 years from the end of the relevant assessment year (i.e., 4 years from the end of relevant tax year).
• The corporate tax rates for Indian companies is proposed to remain unchanged.