Budget for the year 2021 announced a lot of new updates, there are 10 most important things that every individual tax paying salaried person should know.
- The interest on an employee’s share of contribution to the EPF will be taxable if it exceeds Rs 2.5 lakh in any year at the stage of withdrawal. This will also result in additional tax liability, especially for HNIs as they make higher contributions and also discourage voluntary EPF contributions.
- Tax payers will henceforth not be required to estimate their dividend income while making tax payments in advance. As per reports, advance tax can be paid only when dividend is declared or paid by the company.
- The new budget will also states that proceeds from ULIPs that have been issued on or after February 1, 2021, will be taxable as capital gains if the amount of premium is more than Rs 2.5 lakh in any year (except when received on death).
- Senior citizens that are 75 years of age or more and are earning only pension and bank interest income are exempted from filing their income tax returns.
- bank accounts, tax payments and TDS details, pre-filled income-tax returns along with salary income will include details of capital gains from listed securities, dividend income, interest from banks, post office etc.
- Tax exemption for affordable housing has been further extended by 1 year. It will also be beneficial for middle-class first-time home buyers who will get an increased deduction of Rs. 1.5 lakh, in addition to the existing deduction of Rs. 2 lakh for interest on housing loan for a house valued up to Rs. 45 lakh if the loan taken is dated before March 31, 2022 (earlier March 31, 2021).
- Central government will also be announcing rules to determine the manner and year of taxability of income that is obtained from overseas retirement funds by a person while residing in a foreign country. This will put an end to the hardship of double taxation due to mismatch in the timing of residing in multiple countries.
- The time limit for late filing of income tax returns is reduced by three months. The last date to file income tax return is now at December 31 after the closing of tax year. Also, the timeline for completion of the assessment has been reduced by 3 months.
- There will also be a Dispute Resolution Committee (DRC) set up to help tax payers with taxable income up to Rs. 50 lakh and disputed income upto Rs. 10 lakh. This is expected to reduce litigation and act as an impetus to small and medium taxpayers to settle disputes at initial stage.
- Additionally, National Faceless Income-tax Appellate Tribunal Centre will also be set up for all second level appeal cases.
