Union Budget 2021: Changes in the income tax slab could not meet the huge expectation of taxpayers in the Union Budget 2021. Finance Minister Nirmala Sitharaman made several announcements on the direct tax front but tax slabs were not cut for the income taxpayers. At present, two-income tax slabs are applicable in the country. One of these is the traditional tax slab, while the other is the alternative tax slab.
Traditional income tax slabs
Optional income tax slabs
The alternative income tax slabs were announced in the Budget 2020. However, the condition with this is that the income tax payers adopting alternative tax slabs will not be able to take advantage of many tax deductions and exemptions.
Where did you get relief?
- For the purchase of cheap houses, it has been proposed to extend the tax deduction by another year up to Rs 1.5 lakh on the interest of the home loan. That is, taxpayers will now be able to take advantage of this additional deduction till 31 March 2022.
- Proposal to exempt TDS from payment of dividend in Real Estate Infrastructure Trusts / Infrastructure Investment Trusts
- Relief from income tax filing for senior citizens above 75 years of age who are dependent only on pension and interest income from deposits
Shock in these cases
In Budget 2021, it has been proposed that tax exemption should be limited to Rs 2.5 lakhs per annum contribution in case of interest income on employee contribution in various PFs. In such a situation, it will not be completely tax-free for high-income employees to raise large funds through the provident fund. This new proposal will be applicable to PF contributions to be held on or after 1 April 2021. It has also been proposed in the budget that 0.1 percent TDS should be imposed on purchases of more than Rs 50 lakhs in a year. However, it will be limited to only those whose turnover is more than Rs 10 crore.
It has also been proposed that if the employer does not deposit the employees’ contribution to their provident fund and another welfare fund on time, the employer will not get the benefit of deduction on delayed contribution. To know in detail about the announcements made in the direct tax case in the budget, read…