In Budget 2021, FM Smt. Nirmala Sitharaman has left personal Income Tax Rates unchanged, however, it comes with some other changes in Income Tax that will help ease the compliance for taxpayers. Here are the Some Income Tax Changes From April 2021.
Income Tax Changes From April 2021
Pre-filed ITR Forms– For ease of compliance, ITR to have details of salary, TDS, tax payments, etc., and also have pre-filled information on dividend, interest, and capital gains from listed securities.
Dividend payment to REIT/InvIT- The governmnet proposed to make dividend payment to REIT/InvIT exempt from TDS.
Further, the amount of dividend income can not be estimated correctly by the shareholders. For paying advance tax, the government proposed that advance tax liability on dividend income shall arise only after the declaration/payment of dividend. It means that taxpayers will not be required to estimate their dividend income while making advance tax payments.
Higher rate of TDS for non-filing of Income Tax Returns- From FY 2021-22, it is proposed to insert a new section 206AB in the Income Tax Act.
Section 206AB will provide for the higher rate of TDS for the non-filers of Income Tax Return. The proposed TDS rate will be higher of the
a) twice the rate specified in the relevant provision of the act or b) twice the rate or rates in force or c) rate of 5%
Read Full Details Here-
EPF Contribution- Interest on employers’ share of contribution to EPF on or after 1st April 2021 will be taxable at the stage of withdrawal if it exceeds Rs. 2.5 Lakh in any financial year.
Senior citizen exemption- In Budget 2021, it is announced that senior citizens above the age of 75 years, who only have pension and interest as a source of income will be exempted from filing the Income Tax Returns but they are not exempted from payment of tax.
Read Full Article Here- Section 194P- No ITR Filing for Senior Citizen aged above 75 years
LTC Scheme- The government has proposed to provide tax exemption to cash allowance in lieu of Leave Travel Concession (LTC). The scheme was announced by the government in the last year for individuals who were unable to claim their LTC tax benefit due to covid-related restrictions on traveling.
Under this scheme, an employee can claim an exemption under LTC allowance against the purchase of specified goods/services. This scheme is only available till 31st March 2021, i.e. money must be spent by this date to avail of the scheme.
Also Read- Standard Deduction For AY 2022-23
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Compiled by- CA Chirag Agarwal (Practicing Chartered Accountants)