Changes in income tax effect from 1st April 2021Hemlata Khandelwal / 2021-03-13 04:42:18
In the General Budget presented for the financial year 2021-22, Finance Minister announced several major changes in the income tax system which will come into effect from April 1, 2021. Due to this, many rules related to income tax will be changed. In the budget, the Finance Minister did not provide any relief to the middle class and salaried class in income tax. The relief only provides to citizens who are above the age of 75 years called senior citizens and who are dependent on pension were exempted from filing income tax returns. Along with this, there was a provision of strict rules for those not fining income tax returns.
Also announced a change in these rules which will come into effect from April 1.
Tax on EPF contribution
According to the new rules of income tax, which will effect from 1st April 2021, The interest is now taxable on the contribution of employees in PF is above Rs 2.5 lakh per annum. The Minister of finance announced this to rationalize the tax exemption given to employees whose income is high. However, it will not matter to the salary of less than 2 lakh rupees per month.
Pre-field ITR Form
ITR forms already filled before 1 April 2021 will now be provided to individual employees, and their facility and filing of income tax returns will be easier.
Travel Leave Concession (LTC) Cash Voucher Scheme will come into force in the new financial year. The scheme has been launched for employees who did not avail of LTC tax benefit due to the travel ban imposed due to the Coronavirus epidemic.
Super Senior Citizens exempt from filing ITR
Senior citizens above 75 years of age will not have to file ITR from the 1st of April 2021. This exemption relief is given to those senior citizens who are dependent on pension or interest on fixed deposits.
Double TDS for not filing ITR
The central government has tightened the TDS rules to encourage income tax return filing for those who do not file it. for this, section 206AB has been added by the government in the income tax act. Accordingly, if you do not file ITR now, you will have to pay double TDS from 1 April 2021. As per the new rules, (TCS) tax collection at source will be higher even for those who have not filed income tax returns.
Rules which is applicable from 1 July 2021, the Penal TDS and TCL rates will be 10–20 percent, which is usually 5–10 percent. For those persons who are not filing the (income tax return)ITR, the rate of TDS and TCS will be doubled to 5 percent or fixed rate, whichever is higher. These all changes in income tax effect from 1st April 2021