The Union Finance Minister Nirmala Sitharaman, while proposing Union Budget 2021 had announced a new simplified income tax regime to make some relaxation to the salaried class. The income tax changes, that have an effect on the salaried class will come into effect from April 1, 2021. In this article, we will discuss on Rules That Are Changing From April 1, 2021.
Rules That Are Changing From April 1, 2021: Income Tax
The Finance Minister Nirmala Sitharaman, while introducing Union Budget 2021 had announced a new simplified income tax regime to bring some assistance to the salaried class. The income tax changes, that have an effect on the salaried class will come into effect from April 1, 2021.
Also, Sitharaman in her February 1 speech had declared that senior citizens of 75 years and above bringing into the world pension income and interest from fixed deposit in the same bank would not be compelled to file income tax returns for the financial year beginning April 1.
New income tax rules that will come into effect from 1 April
PF tax rules:
Interest on annual employee payments to provident fund over ₹2.5 lakh would be taxed from 1 April 2021. The govt declared that the move is intended for at taxing high-value depositors in the Employee Provident Fund (EPF). Also, the EPF is aimed at the welfare of workers and any person earning less than ₹2 lakh per month will not be implicated by the proposal.
In order to make more people to file ITR Filing, the finance minister has proposed higher TDS (tax deducted at source) or TCS (tax collected at source) rates in budget 2021. The budget has formulated the insertion of new Sections 206AB and 206CCA in the Income Tax Act as a special requirement for the deduction of higher rates of TDS and TCS, respectively for the non-filers of an income tax return for the given time.
Senior citizens above 75 years released from filing ITR:
To relief the compliance burden on senior citizens, finance minister while presenting Budget 2021, had absolved individuals above 75 years from filing income tax returns (ITR).
Pre-filled ITR forms:
Individual taxpayers will be provided pre-filled Income Tax Returns (ITR). In order to relieve compliance for the taxpayer, details of salary income, tax payments, TDS, etc. already come pre-filled in income tax returns.
The central government has provide tax exemption to cash allowance in lieu of Leave Travel Concessio. The scheme was announced by the government last year for individuals who were incapable to claim their LTC tax advantage due to covid-related restrictions on travelling.
What are Income Tax Rates and Slabs under the new tax regime?
Moreover, If you want any other guidance concerning ITR Filing, please feel free to talk to our business advisors at 8881-069-069.
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