New Delhi: Union Minister Nirmala Sitharaman while presenting the Union Budget 2021, announced the slew changes in the income tax rules. As the New Financial Year begins in April 1 this year, the New income tax rules will come into effect from the said date.
The New Rules That Have Come Into Force Are As Mentioned Below:
TDS (Tax Deducted at Source)- The finance minister has proposed higher TDS (tax deducted at source) or TCS (tax collected at source) rates in budget 2021 in order to make more people file income tax returns (ITR). New Sections 206AB and 206CCA had been proposed in the budget as a special provision for the deduction of higher rates of TDS and TCS, respectively for the non-filers of an income tax return.
Senior citizens aged 75 years or more exempt from filing ITR- Finance minister Nirmala Sitharaman while presenting Budget 2021 had exempted individuals above 75 years from filing income tax returns (ITR) to ease the compliance burden on senior citizens. The exemption will be available to only those senior citizens who have no other income but depend on pension and interest income from the bank hosting the pension account.
PF tax rules- As announced in the Budget 2021, if deposits in Employees’ Provident Fund (EPF) and Voluntary Provident Fund (VPF) by an employee exceed Rs 2.5 lakh in a financial year, then the interest earned on the contributions exceeding Rs 2.5 lakh will be taxable in the hands of an employee. The Rs 5 lakh contribution doesn’t include the contribution by the employer.
LTC Scheme-The government announced an LTC cash voucher scheme for its employees. Under this scheme, government employees can opt to receive cash amounting to leave encashment plus 3 times the ticket fare (i.e. Rs 36,000 per person), to buy items that attract Goods and Services Tax (GST) of 12 per cent or more.
Pre-filled Income Tax Return (ITR) forms-In the new financial year beginning , income-tax return forms for individual taxpayers will now come pre-filled with details of capital gains from listed securities, mutual funds, income from dividend, interest from banks and post office, etc. This move is aimed at easing ITR filing for tax payee.
Ms Kalinga