Income Tax Rules: Some rules related to income tax have changed from today. Some of these changes were announced by Union Finance Minister Nirmala Sitharaman while presenting the Union Budget 2021 in February.
These rules related to income tax are changing from April 1
Today, the new financial year has started from April 1. Many rules are changing from the new financial year, which will have a direct impact on the jobber. Some rules related to income tax will change from today. Some of these changes were announced by Union Finance Minister Nirmala Sitharaman while presenting the Union Budget 2021 in February. So let us know about the changes related to income tax which are being implemented from today.
More TDS will be deducted
The Finance Minister has proposed higher TDS (tax deduction at source) or TCS (tax collected at source) rates in the Budget 2021 for filing income tax return (ITR) to more and more people. The Budget has added new sections 206AB and 206CCA to the Income Tax Act to cut higher rates of TDS and TCS for non-filers. According to the new rule, if the ITR is not filed, TDS will be doubled from 1 April 2021.
The elderly will not have to file income tax returns
Senior citizens above 75 years of age do not have to file Income Tax Return (ITR). While presenting the budget, Finance Minister Nirmala Sitharaman had said that the elderly people above the age of 75 years had touched to file ITR. This rule also came into effect from 1 April. Only those elders will get the benefit of this, which is dependent on pension and interest on deposits.
Pre-field ITR Form
Individual taxpayers will be given pre-filled Income Tax Return (ITR) forms. Currently, the information already filled in the ITR form includes personal information, bank details, salary income details as per Form 16, TDS, TCS details, taxes paid as advance tax, etc. This will make it easier to file ITR.
PF Tax Rules
In the Budget for 2021-22, Finance Minister Nirmala Sitharaman has increased the tax free interest earned on provident fund contributions by employees and employers to a maximum of Rs 2.5 lakhs in a year. Now up to 2.5 lakh investment in EPF will be tax free in a financial year. According to the new rule of income tax, from April 1, if you contribute more than 2.5 lakh rupees per annum, you will have to pay tax on the earnings in the form of interest.
Option to choose new tax system instead of old tax system
The government implemented a new tax system in Budget 2020 last year. However, the exercise to choose one of the new and old tax systems for the financial year 2020-21 will start from April 1, 2021.
In the budget 2021, the central government had announced a tax exemption to the cash allowance in lieu of travel concession (LTC). The government had announced the scheme last year for those who could not take advantage of their LTC tax benefits due to restrictions on travel. This plan is only available till 31 March 2021. To avail this scheme, money should be spent till this date.
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