With the beginning of the new financial year, many rules regarding income tax are also going to change. These rules are related to the new tax system to ITR forms etc.
Many rules regarding income tax will be applicable from 1 April 2021.
The current financial year will now end in just a few days. In Budget 2021, the government has not made any change in the rate of personal income tax. However, this time the government has announced several changes regarding tax compliance. Some of these changes are to be implemented from the financial year 2021-22. Let’s know about these changes…
1. The Income Tax Department has decided to implement the already filled Income Tax Return Forms with effect from April 1, 2021. After this is implemented, income taxpayers will have to see whether their ITR has information about salary, TDS, interest and dividend and capital gains from listed securities.
2. Finance Minister Nirmala Sitharaman announced in the budget that if a salaried person contributes more than 2.5 lakh rupees to his PF account during a financial year, the interest on the additional contribution will be taxable. However, he later increased its limit to Rs 5 lakh with one condition. The condition is that tax rebate will be available on contributions up to 5 lakhs only if the contribution from the employer / company does not exceed 12 per cent. However, it has not been clear yet whether this tax will be charged annually on interest or at the time of withdrawal.
3. Senior citizens above 75 years of age will be exempt from income tax filing. However, senior citizens have to keep in mind that their income is being paid only on the pension and interest received on bank deposits. If this is not done, they may have to pay tax.
4. Under section 206AB and 206CCA of the Income Tax Act, from 1 April 2021, the rule regarding TDS is also going to change. If a person has not filed income tax return and has deducted more than Rs 50,000 as TDS and TCS in the last two years, then he will have to pay at least 5% TDS or TCS. Here it will be the responsibility of the tax deductor to collect ITR proof from such a person.
5. LTC Cash Voucher Scheme: The government has announced LTC Cash Voucher Scheme instead of Leave Travel Concession. Under this scheme, LTC allowance will be given on the purchase of any fixed goods and services of the employees. This scheme is applicable only till 31 March 2021. If someone does not make a purchase till this date, then they will not get the benefit of this scheme.
6. Option to choose new tax regime instead of old tax system: The government had announced a new tax system in the budget itself last year. However, this arrangement will be applicable from 1st April 2021 for the tax of FY 2020–21. Taxpayers will have the opportunity to invest in tax saving option only till 31 March 2021. Taxpayers can choose between two tax regimes when filing tax returns for the FY 2020–21.