The Financial Year 2021-22 is here. A number of financial rules have already been changed.
The Financial Year 2021-22 is here. A number of financial rules have already been changed. These changes are expected to impact money and your pocket in FY 2021-22. The government has made the changes in order to facilitate the general public as well as the taxpaying entities. Amit Gupta, MD, SAG Infotech, shares a list of latest rules that have come into effect from 1st April 2021 and are being applied to all the income tax-paying individuals.
1. Reduction in the Deadline for Filing Belated and Updated ITR of FY 2020-2021 to December 31, 2021
The deadline for filing belated and revised Income Tax Return has been reduced by 3 months. This can be understood with the instance:
Last Date if Previous Rule is applicable: The deadline for filing belated and revised ITR for FY 2020-21 is March 31, 2022
New Rule that is Applicable: Along with a maximum penalty of up to Rs 10,000, the deadline for filing belated and revised ITR for FY 2020-21 is December 31, 2021, i.e. the time span for filing has been reduced by 3 months.
2. Modification in Interest Rate of Provident Fund
In the new financial year 21-22, to ensure tax saving on the provident fund, kindly assure that deposits in your EPF account does not exceed the below-mentioned limit. As per new Rules, If “deposits in the Employees’ Provident Fund and Voluntary Provident fund contributed by the employee” is more than Rs 2.5 lakhs in the FY 2021-22, then the Finance Ministry shall lower the burden of individual’s tax by exemption.
3. Raising TDS Filings
The finance ministry has eyed some measures to hike up the income tax return filed for the years, and this would be done by raising the TCS (tax collected at source) or the TDS (tax deducted at source). This would be done by the Sections 206AB and 206CCA inclusions in the IT act and would be considered as special provisions.
The higher TDS or TCS rates will be applicable to the non-filing entities of income tax. Amit Gupta, MD of SAG Infotech says that “The non-filing entities will now be paying a minimum 5% of TDS or TCS and having an INR 50,000 or more TCS/TDS deduction in previous 2 years. Also, the responsibilities will be of a deductor to get the income tax return done for the furnishing.”
4. ITR Forms Now Comes Filled up in Advance
The government has decided to give a pre-filled form to the taxpayers in order to execute the filing of income tax returns in a quick manner. Also, the fields which are set to be pre-filled are details of salary income, tax payments, TDS, etc. Taxpayers can also expect the details like details of capital gains from listed securities, dividend income, and interest from banks, post office, etc. to be pre-filled as per the sources.
5. No Income Tax Filing for Senior Citizens Above 75 Years
The finance minister had been concerned with the senior citizens having an age of more than 75 years and for this, the Nirmala sitharaman has brought down the income tax filing process to exemption. However, this exception will be applicable to pension and the related interest on that pension while having no other income apart from that source.
6. Leave Travel Concession (LTC) Exemption
Although the scheme was only available till 31st march 2021 and the availment was to be calculated on the money spent till this date only, however, the government had given a good benefit to all the claimants who were unable to claim the tax benefits on LTC. The actual scheme was to give the tax exemption to the cash allowance on the leave travel concession.