New Income Tax Rules effects from 1st April 2021

New Income Tax Rules effects from 1st April 2021

The Union Finance Minister Nirmala Sitharaman had been announced a group of changes in the income tax rules. The FM presented those rules when the time of the Union Budget 2021 meeting. However, these new rules should applicable from 1st April 2021.

LTC Scheme: The government announced this scheme in 2020 for individuals who unable to claim their LTC tax benefits due to COVID-related limitations on travelling. In the 2021 budget, the central government has proposed to provide tax exemption to cash allowance in lieu of Leave Travel Concession.

Pre-filled ITR forms: In order to comply with the taxpayers, salary income details, tax payments, TDS individual taxpayers will give pre-filled IT Returns. Further, to simplify the process of filing IT returns, details of capital gains from listed securities, dividend income, and interest from banks, the post office will also be pre-filled.

PF tax rules: Further, the Finance Minister surpass the tax-free interest earned on PF contribution by employees and employers together to a maximum of Rs. 2.50 lakhs in a year. However, she increased the tax exemption limit from Rs. 2.50 lakhs to Rs. 5 lakhs per annum.

Senior citizens above 75 years exempted from filing ITR:  During the time of Union Budget 2021, the FM had exempted individual senior citizens above 75 years from filing ITR to ease the compliance burden on senior citizens.

TDS: TDS stands for tax deducted at source and TCS for tax collected at source. As of the news, the Finance minister has proposed TDS or TCS rates during the time of Union Budget 2021. However, the new sections namely Section 206AB and Section 206CA had obtained in the budget. The move indicates a special provision for the deduction of higher rates of TDS and TCS for the non-filers of an ITR.