It will not be necessary for people above 75 years to file tax returns. Apart from this, here are 10 big announcements related to personal finance made in Budget 2021, such as keeping your money safe in case of banks messing up.
In Budget 2021, it seems that there has been no change in the personal tax rates. Things will be clear only after the entire burea comes out, but here are the issues that can affect your personal finance.
Senior citizens will not have to file income tax return
A major relief has been announced for a section of senior citizens. For people who are 75 years of age or older who are only on pension and interest income, they will no longer have to file income tax returns.
The finance minister has not clarified in this whether the dividend income will be included in it. Many senior citizens also invest a part of their portfolio in equities. The picture of this will be clear only when the fine print of the budget is revealed.
The structure of deposit insurance cover will be better
The finance minister has said that the government and the Reserve Bank will prepare a better policy framework so that depositors can claim deposit insurance on the occasion of the bank’s problems.
The deposit insurance cover for last year’s budget bank depositors has raised from Rs one year to Rs 5 lakh.
However, till now it is available only when the bank sells. A better mechanism will enable the depositors to help the depositors even before the bank is sold.
Adil Shetty, CEO of BankBazaar.com, says, “This is a positive thing and customers will get protection in a situation in which we have seen in the past that the RBI imposed a moratorium on banks and imposed restrictions on withdrawal of deposits.”
More workers will get the benefit of social security
During the COVID-19 last year many tax-paying citizens lost their jobs. These people had to start freelancing work. Such people have been given some relief in the budget.
Social Security Benefit is also given for such workers. E-commerce workers have been brought under the Employees ‘State Insurance Scheme (ESI), Employees’ Provident Fund (EPF) and minimum wage rules.
Women have been allowed to work night shifts in all categories.
Promote Faceless Assessment
Faceless assessment is further emphasized in Budget 2021. There is an effort to make it stronger.
A (faceless) Dispute Settlement Committee will be formed. Any person with taxable income up to Rs 50 lakh and disputed income up to Rs 10 lakh can go to this committee.
Investment Charter for Financial Products
The Finance Minister has announced the setting up of an investment charter to reduce mis-selling of financial products (false promises in sales or other misappropriation).
The charter will be for investors of all products across the financial sector. The picture will be clear when the details about this are revealed, but it is expected that the rights of investors will be decided in this charter. Apart from this, it should also outline the mechanism to address the grievances of the people. The charter should further strengthen the grievance redressal mechanism of existing financial products.
High Speed Tax Solutions
The timeline for re-opening of assessments under Income Tax Returns has now been reduced to three years from the earlier six years.
Serious cases of tax evasion will also be the only cases where there will be evidence to hide income of Rs 50 lakh or more in a year.
Assessment can be opened in 10 years in such cases. This will reduce the burden on the tax authorities and will provide relief for the tax payers as well as it will also open the way for early disposal of cases.
Detailed pre-field tax form
This year the Finance Minister has said that in addition to the tax deduction at source (TDS), the capital gains and the details of interest from banks and post offices will be pre-filled. Pre-filled forms will improve tax compliance as well as help taxpayers to pay their taxes easily.
Reduction on home loan interest increased
Affordable housing also got a boost in the budget. The benefits available for buying a cheap house will now be extended to those who will buy a home loan by 31 March 2022.
Zero Coupon Bond for Tax Benefit Infra
Soon retail investors will have another instrument to invest. To increase infrastructure growth, Budget 2021 has announced that infrastructure debt funds can now raise money by issuing zero coupon bonds with tax benefits.
On getting more details about this, the picture will be clear and it will only know to what extent these bonds will get income tax benefits.
Relief for NRIs
Double taxation has been changed for NRIs. Especially NRIs who return to India. It is also being considered to provide relief to such people who face difficulties in getting credit on tax paid in India.