The announcements made by the finance minister in the budget this year will come into effect from April 1, know what these changes are.
The announcements made in the budget this year are to come into effect from April 1, 2021. In the budget, Finance Minister Nirmala Sitharaman has given some relief to the middle class and salary class in income tax. However, those who are more than 75 years of age were relieved from filing income tax returns this time.
With this, it has been decided to take strict action against those who do not file income tax returns. All these changes will come into effect from 1 April 2021. Know what these changes are.
Tax on EPF contribution
According to the new rules of income tax, from 1 April 2021, you will have to pay tax on the interest that will accrue if you make a PF contribution of more than 2.5 lakh rupees annually.
Employees who have higher income cannot save more tax through PF contribution, hence Finance Minister Nirmala Sitharaman announced this.
However, monthly salary of 2 lakh rupees will not make any difference.
Pre-field ITR Form
Individual employees will now be provided with a pre-field ITR form from April 1, 2021, for the convenience of employees and to simplify the process of filing income tax returns. This will make it easier to file ITR.
Advantage of LTC scheme
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 LTC tax benefit due to travel ban imposed due to Corona virus epidemic.
Super Senior Citizens exempt from filing ITR
From 1 April 2021, senior citizens above 75 years of age will not have to file ITR. This exemption has been given to senior citizens who are dependent on pension or interest on fixed deposits.
Double TDS on not filing ITR
The central government has tightened TDS rules to encourage ITR filing for those who do not file ITRs. For this, the government has added section 206AB to the Income Tax Act.
According to this, if you do not file ITR now, you will have to pay double TDS from April 1, 2021. According to the new rules, tax collection at source (TCS-TCS) will also be higher on those who have not filed income tax returns.
According to the new rules, from 1 July 2021, the Penal TDS and TCL rates will be 10–20 per cent, which is usually 5–10 per cent. For those not filing ITR, the rate of TDS and TCS will be doubled to 5 per cent or fixed rate, whichever is higher.
