From higher TDS to new PF rules, here are all the changes in income tax norms that come into effect from April 1.
Here are the changes in income tax rules that will come into effect from today. (Representative image)
As we step into the new financial year 2021-22 (FY22) from today, our income tax process will see a slew of changes. These were announced by Finance Minister Nirmala Sitharaman during the presentation of the Union Budget 2021-22 in February.
Let us take a look at the changes that will come into effect from today, April 1:
TDS (Tax Deducted at Source)
Higher TDS (tax deducted at source) or TCS (tax collected at source) was proposed by the finance minister in order to make more people file their income tax returns. The insertion of two new sections — Sections 206AB and 206CCA — had been proposed during the budget in February as a special provision for deduction of higher TDS and TCS from those not filing ITR.https://images.indianexpress.com/2020/08/1×1.pngAlso Read |Small Savings Schemes: Latest interest rates on PPF, NSC, Sukanya Samriddhi and more
Senior citizens aged 75 years or more exempt from filing ITR
The finance minister in her Budget 2021-22 proposed that individuals above the age of 75 years will be exempted from filing ITR. This was done to ease the compliance burden on senior citizens. This will be available for only those who do not have any other income and depend on their pension and the interest income from the bank with which they are holding their pension account.
PF tax rules
The tax-free interest on EPF contribution by employees and employers has been capped to a maximum of Rs 2.5 lakh in a year. The finance minister has also raised the tax exemption limit earned on PF contribution by employees to Rs 5 lakh in specified cases as against the proposed Rs 2.5 lakh. The Rs 5 lakh contribution doesn’t include the contribution by the employer.
Pre-filled Income Tax Return (ITR) forms
In the new financial year beginning from today, 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 taxpayers.
In Budget 2021, the government gave a proposal to provide tax exemption to cash allowance in lieu of Leave Travel Concession (LTC). This scheme was announced last year by the government for individuals who were unable to claim their tax benefit on LTC due to Covid-related travel restrictions.