5 New Income Tax Rules Set To Be Implemented From 1st April, Check Details Here

Some of these new rules include exemption for filing ITR returns for senior citizens of the age 75 and above with income from pension and interest from fixed deposit in the same bank among others. Check them here.

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In the Union Budget 2021, Finance Minister Nirmala Sitharaman announced a couple of changes in the income tax rules which are set to come into effect from 1 April 2021. Some of these new rules include exemption for filing ITR returns for senior citizens of the age 75 and above with income from pension and interest from fixed deposit in the same bank.

Among other changes are the proposed higher TDS (tax deducted at source) for those who are not filing their ITR and taxing those who are contributing above ₹2.5 lakh annually to the EPF account. Also Read: TN Elections 2021: Why Opposition Parties In Tamil Nadu Are Promising To Abolish NEET In Their Poll Manifestos

Here are the changes to be effected from April 1:

1) PF tax rules: The government’s decision to tax the high-value depositors in the Employee Provident Fund (EPF) has come as a shocker for many. One of the changes announced is that interest on annual employee contributions to provident fund over ₹2.5 lakh would be taxed from 1 April 2021. While announcing the change, the FM said it is aimed at the welfare of workers, and any person earning less than ₹2 lakh per month will not be affected by the proposal.

2) TDS: In an attempt to ensure that more people file income tax returns (ITR), the finance minister has proposed higher TDS (tax deducted at source) or TCS (tax collected at source) rates. The Union Budget 2021 has proposed the incorporation of new Sections 206AB and 206CCA in the Income Tax Act as a special provision for the deduction of higher rates of TDS and TCS, respectively for the non-filers of an income tax return.

3) Senior citizens above 75 years exempted from filing ITR: In tune with several measures to ease the compliance burden on a common man during Covid times, the government has announced some relief for senior citizens above 75 years this budget. The Budget 2021 has exempted filing ITR returns for those above 75 years from filing income tax returns (ITR). Remember, senior citizens who have no other income but depend on pension and interest income from the bank hosting the pension account.

4) Pre-filled ITR forms: Making the process of tax payment easier, the government has proposed pre-filled Income Tax Returns (ITR) including details of salary income, tax payments, TDS, etc. including in income tax returns. In fact, details of capital gains from listed securities, dividend income, and interest from banks, post office, etc. will also be pre-filled.

5) LTC: The government has proposed a tax exemption to cash allowance against Leave Travel Concession (LTC). This particular scheme was announced by the government in 2020 to spur spending in the economy by allowing individuals who were unable to claim their LTC tax benefit due to covid-related restrictions on travelling.