Budget 2021: From Exemption In ITR Filing For Senior Citizens Above 75 To Tax Relief For NRIs, Check What’s For Taxpayers In This Budget

Although FM laid stress saying the tax system should put a minimum burden on the taxpayers, but she didn’t announce any change in income tax slab rates including the introduction of covid cess on HNIs which was highly anticipated.

Nirmala Sitharaman

The annual Budget 2021 has assumed significance for every sector including the common man who faced the wrath of the pandemic as a result of economic upheaval. There has been little relief offered by the Finance Minister in terms of tax, but Finance Minister Nirmala Sitharaman announced certain benefits for depositors, investors and taxpayers.  Although she laid stress saying the tax system should put a minimum burden on the taxpayers, but didn’t announce any change in income tax slab rates including the introduction of covid cess on HNIs which was highly anticipated. Also Read: Budget 2021: Ahead Of Bengal Elections, FM Allocates Rs 25,000 Crore For Upgradation Of Roads And Highway

What are the measures announced?

• Interest earned on Provident Fund contribution above Rs 2.5 lakh in a year to become taxable.
• No tax burden on senior citizens above 75: FM reduced the compliance burden on senior citizens who are 75 years of age and above. For senior citizens who only have pension and interest income, she propose exemption from filing their Income Tax return.
• Tax assessment can be re-opened only up to 3 years- Sitharaman said that income tax assessment could earlier be reopened up to six years. This time limit hasn now been reduced to three years.
• Dispute Resolution Committee for small taxpayers
• Additional deduction of Rs 1.5 lakh for purchasing affordable house. It means for buyers of affordable houses, Finance Minister Nirmala Sitharaman has extended the time period of taking loans to buy such houses by one year – i.e. from March 31, 2021 to March 31, 2022 – to avail additional tax benefits of Rs 1.5 lakh u/s 80EEA of the Income Tax Act.
• Relief from double taxation for NRIs-"In order to remove the genuine hardship faced by the NRIs in respect of their income accrued on foreign retirement benefit account due to mismatch in taxation, it is proposed to notify rules for aligning the taxation of income arising on foreign retirement benefit account," SItharaman said in Budget speech
• Attempts will be made to reduce anamolies incuding the inverted GST structures.
• Dividend payment to REIT/InvIT to be exempted from TDS
• Rationalise taxation of ULIP: The FM proposed to allow tax exemption for maturity proceed of the ULIP having annual premium up to Rs 2.5 lakh. However, the amount received on death shall continue to remain exempt without any limit on the annual premium. The cap of Rs 2.5 lakh on the annual premium of ULIP shall be applicable only for the policies taken on or after 01.02.2021. "Further, in order to provide parity, the nonexempt ULIP shall be provided same concessional capital gains taxation regime as available to the mutual fund," Sitharaman said.