The monetary yr is ending quickly. Budget 2021 has left private earnings tax charges unchanged, nevertheless, it got here with some adjustments, majorly on the compliance entrance. Some adjustments are proposed to be efficient from the monetary yr 2021-22, and a few might be applied from the beginning of the approaching monetary yr itself i.e 1st April 2021. The adjustments relevant from the approaching yr are as beneath:
1) The earnings tax division has additional prolonged pre-filled sections in ITRs from 1st April 2021. Archit Gupta, Founder and CEO of Cleartax mentioned, “Taxpayers need to make sure that the pre-filled ITRs containing the details of salary, TDS, interest and dividend income, capital gains from listed securities, is accurate.”
2) Nirmala Sitharaman has introduced within the Union Budget 2021-22 that PF contributions over ₹2.5 lakh in a monetary yr might be taxable from the following monetary yr. “Taxpayers in the higher tax bracket, who deposit more than ₹2.5L in their EPF account as an employee contribution, need to consider that the interest portion on such excess shall become taxable,” Gupta mentioned.
3) Senior residents above the age of 75 shall be exempted from submitting ITR. Cleartax spokesperson Archit Gupta defined, ” Senior Citizens must ensure that they obtain a pension and curiosity earnings from the identical financial institution, or else they will not be eligible for this exemption. Also, senior residents with another kind of earnings (aside from pension and curiosity earnings) won’t be eligible.
4) TDS applicability-Onwards 1st April 2021, new sections 206AB and 206CCA shall change into relevant. “The individuals who have not filed the income tax returns, however, have a TDS or TCS deduction of more than ₹50,000 in the last 2 years, will have to pay TDS or TCS subject to a minimum of 5%. Here the deductor will now become responsible for collecting the ITR proof from the individuals for compliance,” mentioned Gupta.
5) LTC money voucher scheme: The authorities notified the LTC money voucher scheme’s exemption instead of a go away journey concession (LTC). Under this scheme, an worker can declare an exemption underneath LTC allowance in opposition to the acquisition of specified items/providers. This scheme is just accessible until thirty first March 2021, i.e. cash should be spent by this date to avail of the scheme.
6) Option to decide on ‘New tax regime’ as a substitute of Old tax regime: “The government had implemented the new tax regime last year in Budget 2020. However, the exercise of choosing one of the tax regimes for FY 2020-21 will be required to be made starting from 1st of April 2021. Taxpayers still have time until 31st March 2021 to make tax-saving deductions, however, they will be able to opt for a beneficial regime at the time of filing their tax returns for FY 2020-21,” he mentioned.
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