In the general budget presented for the coming financial year, middle class and salaried class were not given any relief in income tax. Only senior citizens who are above 75 years of age and who are dependent on pension, were exempted from filing income tax returns. As more and more people file income tax returns (ITR), a provision of strict rules has been made in the budget 2021 for those who do not finance income tax returns. Some changes were made in the income tax rules in the budget so that the salaried class can be easier to file returns (ITR). These changes will come into effect from April 1, 2021. Every taxpayer should know about these 5 changed rules.
EPF contribution means a contribution to employee provident fund
As per the new income tax rules, from 1 April 2021, the interest on PF contribution of employees above Rs 2.5 lakh per annum will now be taxable. Finance Minister Nirmala Sitharaman announced this to rationalize the tax exemption given to employees whose income is high.
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.
Notified LTC Scheme
In the Budget 2021, the Modi Government has notified the Travel Leave Concession (LTC) Cash Voucher Scheme. The scheme was launched for employees who did not take advantage of LTC tax benefit due to travel restrictions imposed due to corona virus epidemic.
Super senior citizens exempt from filing ITR
In the budget, the Finance Minister announced that 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 for not filing ITR
The central government has tightened the TDS rules to encourage filing ITRs 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 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.