New income tax rules are coming into effect from tomorrow! Change the rule from TDS to PF, find out what will change
The month of March is already considered very important, as the financial year ends on the last date of this month. Union Finance Minister Nirmala Sitharaman announced changes to the income tax rules in the Union Budget 2021. This change will take effect from tomorrow i.e. 1st April 2021. Let us know about the changes announced in the Union Budget in February which are being implemented from tomorrow.
The new financial year is starting from April one. Many rules will change in the new financial year, which will have an impact on everyday life. Everything from taxes to bank mergers are going to change. Which has a direct effect on the average person.
TDS
The government has tightened the rules for those who do not file income tax returns. Under this, if ITR is not filed now, TDS will have to be doubled from April 1, 2021. Under the new rules, tax collection at source (TCS-TCS) will also be higher on those who have not filed income tax returns. Under the new rules, penalized TDS and TCL rates will be 10-20% from July 1, 2021, which is usually 5-10%.
Option to choose a new tax system
The government announced a new tax system in the budget last year. However, this arrangement for tax for the financial year 2020-21 will come into effect from 1 April 2021. Taxpayers will have the opportunity to invest in a tax saving option until March 31, 2021. Taxpayers can choose between two tax systems when filing a tax return for the financial year 2020-21.
Tax relief for people over 75 years of age
Citizens over the age of 75 will not be required to file an ITR from April 1, 2021. This exemption is given to senior citizens who are dependent on pension or on interest on fixed deposit.
PF tax rule
In the 2021-22 budget, a tax on interest received from the Employees Provident Fund (EPF) was announced. Now investing up to Rs 2.5 lakh in EPF will be tax free in the financial year. If you invest more than that, the interest earned on the extra amount will be taxed. This means that if you have deposited Rs 3 lakh per annum, the income earned through interest on Rs 50,000 will be taxed at the rate of your tax slab.
Pre-filled ITR form
For the convenience of employees and to facilitate the process of filing income tax returns, pre-filled ITR forms will now be provided to individual taxpayers from 1 April 2021.
LTC Cash Voucher
The government has announced an LTC case voucher scheme instead of a leave travel concession. Under this scheme, employees will get LTC allowance on purchase of any fixed goods services. The scheme will be valid till March 31, 2021 only. If one does not buy by this date, he does not get the benefit of this scheme.
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