During the budget 2021, Finance Minister Nirmala Sitharaman announced some changes in the income tax rules. It will come into force from April 1. These rules are related to Provident Fund, Tax Deducted at Source, ITR filing for senior citizens, Leave Travel Concession among others.
Rules are given below:
Provident Fund: Individuals earning more than Rs 2.5 lakh will have to pay taxes on the interest on annual employee contributions to provident fund. The government with this decision is aiming to tax high-value depositors in the Employee Provident Fund (EPF).
Tax Deducted at Source or Tax Collected at Source: Under the new rules, higher TDS (tax deducted at source) or TCS (tax collected at source) rates have been introduced. in the Income Tax Act has been proposed in the budget as a special provision for the deduction of higher rates of TDS and TCS, respectively for the non-filers of an income tax return.
Senior citizens exempted from filing ITR: In Budget 2021, senior citizens above the age of 75 years are exempted from filing income tax returns (ITR). This will be a relief for all of them. However, this exemption is valid to only those senior citizens who depend on pension and interest income from banks.
Filled ITR forms: Individual taxpayers will be given pre-filled Income Tax Returns (ITR) which will include details of capital gains from listed securities, dividend income, and interest from banks, post offices, etc. The move is aimed at easing the filing of returns.
Leave Travel Concession: Taxpayers who were unable to claim their LTC tax benefit due to COVID-related restrictions on travelling will be able to avail this tax exemption.