Income-tax rules change frequently, and an amendment that was important when introduced may not necessarily remain applicable in the same form five years later. Several significant tax changes were introduced through the Finance Act, 2021, including taxation of interest on high employee provident-fund contributions, relief for certain senior citizens, higher TDS/TCS for specified non-filers and changes aimed at simplifying income-tax returns.
Some of these rules remain relevant in 2026, while others have subsequently been removed or were only temporary measures. Sharda Associates helps taxpayers and businesses understand current income-tax provisions, review deductions and TDS requirements and file returns according to the law applicable to the relevant financial or tax year.
Why Do the 2021 Tax Amendments Still Matter in 2026?
Taxpayers often find old articles while searching for an income-tax rule and assume that the provision is still applicable.
That can create mistakes.
For example, Sections 206AB and 206CCA were introduced in 2021 to impose higher TDS and TCS on certain non-filers. However, those provisions were later removed.
On the other hand, the rule taxing interest attributable to employee provident-fund contributions above the prescribed annual limit continues to remain relevant.
Therefore, understanding the current status of a tax amendment is more useful than simply knowing when it was originally introduced.
Another important change is that from 1 April 2026, the Income-tax Act, 2025 has come into force. This means section numbers and forms are being reorganised even where the underlying tax concept continues.
1. Tax on Interest From High Provident Fund Contributions
One important amendment introduced from 1 April 2021 affected employees making high contributions to provident-fund accounts.
Earlier, interest credited to eligible provident-fund accounts generally enjoyed tax-exempt treatment subject to the applicable conditions.
The 2021 amendment introduced taxation of interest attributable to the employee’s own contribution exceeding a prescribed annual limit.
The normal threshold is ₹2.5 lakh of employee contribution in a year.
Where there is no employer contribution to the fund, the corresponding threshold is ₹5 lakh.
This does not mean that your entire provident-fund balance becomes taxable once the threshold is crossed.
It also does not mean that the excess contribution itself is taxed again merely because it exceeds ₹2.5 lakh.
The rule concerns the interest attributable to the contribution above the specified limit.
Example
Suppose an employee contributes ₹4 lakh from their own funds to an eligible provident fund during the year and employer contributions are also made.
The ₹2.5 lakh threshold is relevant.
The interest attributable to the excess employee contribution, calculated under the prescribed mechanism, becomes taxable.
The provident-fund framework maintains the necessary distinction between taxable and non-taxable contribution components for this purpose.
This amendment remains relevant in 2026.
2. Higher TDS and TCS for Non-Filers: No Longer Applicable
Finance Act 2021 introduced Sections 206AB and 206CCA.
The idea was to encourage income-tax-return compliance by applying higher TDS or TCS rates to certain persons who had not filed their income-tax returns and satisfied the specified conditions.
At the time, businesses had to determine whether a vendor or customer qualified as a “specified person” before applying the normal TDS/TCS rate in covered cases. However, this rule should not be presented as a current 2026 requirement.
Section 206AB was omitted with effect from 1 April 2025, and the corresponding special higher-rate mechanism for specified non-filers was removed from the current compliance framework.
Therefore, an old article saying that businesses in 2026 must check Section 206AB before every applicable TDS transaction is outdated.
Normal TDS provisions, PAN-related higher-rate rules and other applicable tax requirements still need to be followed separately.
3. ITR Filing Relief for Certain Senior Citizens Aged 75 or More
Another significant 2021 amendment provided income-tax-return filing relief to certain resident senior citizens aged 75 years or more. However, this exemption was never meant for every person above 75 years of age.
Specific conditions apply. The senior citizen must generally be resident in India and should have qualifying pension income along with eligible interest income from the specified bank in which the pension is received.
The specified bank is responsible for determining the taxable income and deducting the appropriate tax after considering the information and declaration furnished by the senior citizen. Where all prescribed conditions are satisfied, the senior citizen is not required to separately file the income-tax return.
The concept continues under the current tax framework, although the Income-tax Act, 2025 and Income-tax Rules, 2026 use reorganised provisions and forms.
Therefore, a person aged 76 should not automatically conclude:
“I am above 75, so I do not have to file an ITR.”
The type and source of income, residential status, bank and prescribed declaration all need to satisfy the applicable requirements.
4. Expansion of Pre-Filled Income Tax Returns
The Government also expanded the use of pre-filled information in income-tax returns. Taxpayers increasingly began seeing information relating to salary, TDS, interest, dividends and certain investment or transaction details automatically reflected through the income-tax system. By 2026, pre-filled information has become a normal part of online income-tax filing.
But pre-filled does not mean automatically correct. Suppose your ITR utility displays bank interest of ₹75,000.
You should still compare it with bank statements, interest certificates and the tax information available to you.
Similarly, the taxpayer should review relevant information appearing in Form 26AS and AIS rather than filing the return without checking the source data.
Pre-filling reduces data-entry work. It does not transfer responsibility for the accuracy of the return from the taxpayer to the Income Tax Department.
5. LTC Cash Voucher Scheme Was a Temporary COVID-Era Measure
The Leave Travel Concession Cash Voucher Scheme also appeared prominently in the 2021 tax amendments. This measure arose because COVID-related travel restrictions prevented many employees from using normal LTC benefits.
Eligible employees were allowed to obtain specified tax relief by spending on qualifying goods and services according to the prescribed conditions instead of undertaking the normal travel. However, this was a temporary COVID-era relief measure.
It should not be presented in a 2026 blog as a current general alternative to normal Leave Travel Concession.
An employee planning LTC today should follow the current LTC provisions applicable to their employment and tax regime instead of relying on the old Cash Voucher Scheme.
This is a good example of why old income-tax articles need periodic updates. A rule may be historically correct and still be wrong when presented as a current benefit.
6. Higher Tax Audit Limit for Businesses With Low Cash Transactions
Another important Finance Act 2021 change remains highly relevant for businesses.
The tax-audit turnover threshold for business was increased to ₹10 crore where both:
cash receipts do not exceed 5% of total receipts, and
cash payments do not exceed 5% of total payments,
subject to the prescribed rules.
Where these conditions are not satisfied, the normal business tax-audit turnover threshold is generally ₹1 crore, subject to other provisions such as presumptive taxation.
This amendment was intended to provide compliance relief to businesses carrying out substantially digital or banking-based transactions.
Example
Suppose a business has turnover of ₹7 crore and practically all receipts and payments are through banking channels, with cash receipts and cash payments each remaining within the prescribed 5% limits.
The enhanced ₹10 crore tax-audit threshold may become relevant. However, the business should calculate both the cash receipt percentage and cash payment percentage separately.
Being below 5% on receipts but above 5% on payments would not satisfy the enhanced-threshold condition.
The ₹10 crore threshold continues under the Income-tax Act, 2025 framework applicable from 1 April 2026.
An Important 2026 Transition: Which Income Tax Act Applies?
This is particularly important during 2026 because India has moved from the Income-tax Act, 1961 to the Income-tax Act, 2025.
The new Act applies from 1 April 2026. However, this does not mean that FY 2025-26 tax returns suddenly have to be prepared completely under the new Act merely because they are filed after 1 April 2026.
For example, the return and tax-audit compliance relating to FY 2025-26 / AY 2026-27 continues to be governed by the applicable provisions of the Income-tax Act, 1961 for that period.
Transactions and income relating to Tax Year 2026-27 onwards move into the Income-tax Act, 2025 framework.
This distinction is important whenever an old and new section number appear in different tax articles. The transaction year should be identified first.
What Should Taxpayers Take From the 2021 Amendments Today?
The biggest lesson is that income-tax amendments should not be read without checking their effective date and current status. The provident-fund interest rule introduced in 2021 remains relevant. The special senior-citizen return-filing relief continues for qualifying cases.
Pre-filled income-tax-return information has become part of normal online filing.
The higher ₹10 crore tax-audit threshold for qualifying low-cash businesses also continues.
But Sections 206AB and 206CCA should no longer be treated as current higher-rate provisions for non-filers, and the LTC Cash Voucher should be treated as a historical COVID-period measure rather than a current tax-saving option.
Conclusion
The tax amendments introduced in 2021 affected provident funds, TDS/TCS, senior citizens, income-tax-return filing and business compliance. But a 2026 taxpayer should not assume that every rule announced five years ago continues unchanged.
Some changes, such as the provident-fund interest rule, senior-citizen relief and higher tax-audit threshold for qualifying low-cash businesses, remain relevant. Others, such as Sections 206AB and 206CCA, were subsequently removed, while the LTC Cash Voucher was only a temporary relief measure.
From 1 April 2026, taxpayers also need to recognise the transition to the Income-tax Act, 2025 and check which law applies to the particular tax year being dealt with.
Sharda Associates helps individuals and businesses review current income-tax provisions, tax deductions, TDS requirements, tax-audit applicability and ITR compliance so that decisions are based on the rules actually applicable today rather than outdated tax information.
For a CA-certified project report for only Rs 2999, turn to Sharda Associates, which has a proven track record of 45,500+ successful reports across India. Call us now at 8989977769 for experienced advice.
Frequently Asked Questions
Q1. Is interest on EPF completely tax-free in 2026?
Not necessarily. Interest attributable to an employee’s own contribution above the prescribed annual threshold can be taxable. The normal threshold is ₹2.5 lakh, increasing to ₹5 lakh in the specified case where there is no employer contribution.
Q2. Is the employee’s entire PF balance taxable if contribution exceeds ₹2.5 lakh?
No. The rule relates to interest attributable to contributions above the specified limit, not taxation of the entire accumulated PF balance merely because the threshold is crossed.
Q3. Does Section 206AB still apply in 2026?
No. Section 206AB, which imposed higher TDS on specified non-filers, was omitted with effect from 1 April 2025.
Q4. Does every senior citizen above 75 years get exemption from filing ITR?
No. The relief is available only to qualifying specified senior citizens who satisfy conditions relating to residence, pension, interest income, specified bank and the prescribed declaration.
Q5. Are pre-filled ITR details always correct?
No. Pre-filled information should still be reconciled with Form 26AS, AIS, bank records and other relevant documents before filing the return.
Q6. Is LTC Cash Voucher Scheme still available in 2026?
The special LTC Cash Voucher Scheme discussed in the 2021 Budget was a temporary COVID-era measure and should not be treated as a current general tax benefit.
Q7. What is the current tax-audit turnover limit?
For business, the normal threshold is generally ₹1 crore, but it can increase to ₹10 crore where cash receipts and cash payments each do not exceed 5% of their respective totals, subject to the applicable provisions.
Q8. Which Income Tax Act applies from 1 April 2026?
The Income-tax Act, 2025 applies from 1 April 2026. However, compliance relating to earlier financial years must still be handled according to the law applicable to those periods.