From April 1, senior citizens aged 75 and up who earn income from a pension and interest from a fixed deposit in the same bank will be excluded from filing ITR under the new regulations.
The new fiscal year starts on April 1st. In her presentation of the Union Budget 2021, Union Finance Minister Nirmala Sitharaman announced a slew of amendments to the income tax law. These modifications will take effect tomorrow, April 1, 2021. So, let's take a look at the income tax reforms revealed in the Union Budget in February that will take effect tomorrow.
Let's look at some of the income tax amendments that will take effect on April 1st:
TDS: In budget 2021, the finance minister proposed higher TDS (tax deducted at source) or TCS (tax collected at source) rates to allow more people to file income tax returns (ITR). The budget proposes adding new Sections 206AB and 206CCA to the Income Tax Act as a special provision for the deduction of higher TDS and TCS rates for non-filers of an income tax return, respectively. Individuals that have not paid income tax returns but have a TDS or TCS deduction of more than $50,000 in the previous two years would be required to pay TDS or TCS at a rate of at least 5%. The deductor will also be in charge of obtaining ITR evidence from individuals to ensure compliance.
Option to choose 'New tax regime' rather than 'Old tax regime': The government introduced the new tax regime in Budget 2020 last year. However, beginning on April 1, 2021, the exercise of selecting one of the tax regimes for FY 2020-21 will be necessary. Taxpayers have until March 31, 2021, to make tax-saving deductions, but they will be able to choose a favorable regime when filing their tax returns for the fiscal year 2020-21.
Senior citizens over 75 years old are exempted from filing ITRs: In her presentation of Budget 2021, Finance Minister Nirmala Sitharaman declared that individuals over 75 years old are exempted from filing income tax returns (ITR). Only senior citizens who have no other source of income and depend solely on their pension and interest from the bank that hosts their pension account will be eligible for the exemption.
PF tax laws are as follows: FM Nirmala Sitharaman limited the tax-free interest received on provident fund contributions by workers and employers combined to a limit of 2.5 lakh per year in her Budget for 2021-22. She then increased the annual cap for tax exemption on interest received on employee provident fund contributions from 2.5 lakh to 5 lakhs in defined cases, up from 2.5 lakh previously. The donation of up to $5 lakh does not include the employer's contribution.
Individual taxpayers will be provided with pre-filled Income Tax Return forms (ITR
). Details of wage revenue, tax payments, TDS, and other information are now pre-filled in income tax reports to make enforcement simpler for the taxpayer. Details of capital gains from listed shares, dividend profits, and interest from banks, post offices, and other sources will be pre-filled to make filing returns much easier. The switch is intended to make filing returns easier.
In Budget 2021, the central government introduced a tax exemption for cash allowances instead of Leave Travel Concessions (LTC). Last year, the government proposed a program for people who were unable to claim their LTC tax gain due to covid-related travel restrictions. This scheme is only valid until March 31, 2021, which means money must be invested by that date to apply.
Read More Blogs:
Legendary Asha Bhosle to awarded Maharashtra Bhushan- all about her journey
Former RBI Deputy Governor KC Chakrabarty passes away- A glimpse of his journey
What is Blue Flag Certification? Know the history behind it.