Amendment in tax laws – The Income Tax Act of 1961 is a law that governs the levy, administration, collection, and recovery of income tax in India. The act entered into force on April 1, 1962. It is divided into 298 elements and 14 schedules. The law aids in determining taxable revenue, tax liability, appeals, fines, and indictment. The act has been amended on a regular basis by the legislature.
Five new amendment in tax laws from 1st April 2021
PF tax rules:
The interest rate on the annual employee’s contributions to the provident fund over the amount of Rs.2.5 Lacs. would be taken as a tax from 1 April 2021 onwards. The government announced that the move is aimed at the high rate of taxing value which will transfer to the Employee Provident Fund (EPF). The Finance Minister of India Nirmala Sitharaman said that the EPF is aimed at the welfare of the workers and any person who is earning less than the amount of Rs. 2 Lacs. per month will be not affected by the proposal.
The government wants that more people will file income tax returns (ITR), so the finance minister of India has proposed the higher TDS ( tax deducted at sources ) or TCS ( tax collected at source) rates in the budget 2021. The budget has proposed the insertion of new Sections 206AB and 206CCA in the Income Tax Act as a special provision for the deductions of the higher rates of the TDS and TCS, respectively for non-filters of an income tax return.
Senior citizens above 75 years exempted from filing ITR:
To reduce the burdens from the senior citizens, the finance minister of India Nirmala Sitaraman, while the Budget of 2021, had exempted the individuals who were above the age of 75 years from filing the income tax returns (ITR). This type of exemption will be available only to those senior citizens who have no other income but depends only on their pensions and interest income which comes from the bank hosting the pensions accounts.
Pre-filled ITR forms:
An individual taxpayer will be given pre-filled Income Tax Returns (ITR). In order to reduce the compliances for the taxpayer, details of the capital gains from the listed securities, dividend income, and the interest from the banks, post office, etc. can also be pre-filled. The move is aimed at easing the filling of the returns.
The Central Government in Budget 2021 has announced that to provide the tax exemption to cash allowance in the guidance of Leave Travel Concession (LTC). This scheme was declared by the government last year for the individuals who were unables to claim their LTC tax which benefits due to covid- related to restrictions on the travelling.