Budget 2021: Key changes in Income Tax | Fusion - WeRIndia

Budget 2021: Key changes in Income Tax

Budget 2021: Key changes in Income Tax

The Finance Minister did not propose any change in the existing income tax slabs.

However, the minister proposed changes in the following:

  • From now onwards, senior citizens aged above 75 years need not file income tax returns. As per the newly inserted Section 194P, banks will deduct tax on pension and interest from bank accounts if the amount exceeds tax limit.
  • The time for assessment proceedings has been reduced to three years from six years. However, this does not apply to cases of serious tax evasion.
  • To remove double taxation for NRIs, the government proposed new rules.
  • The tax holiday for startups has been extended up to 31st March 2022.
  • Similarly, the additional tax deduction for affordable housing has also been extended to 31st March 2022.
  • To help small taxpayers and enhance transparency in the disposal of appeals, the government proposed to set up a faceless dispute resolution mechanism.
  • From now on, advance tax is applicable on dividend income only after its declaration.
  • If the employer deducts the employee’s PF contribution but does not deposit it, then the employer would not be able to claim it as a deduction.
  • Pre-filling of income tax returns will be allowed for salary, tax payments, TDS, etc. Besides, details of capital gains from listed securities, dividend income etc. will also be prefilled.

Meanwhile, due to the increase or decrease in customs duty, certain items will become cheaper while some others become costlier.

Here is a list of some items that will become costlier:

  • Air conditioners, refrigerators, solar inverters and lanterns, mobile phones and charger components, LED lights, plastic builder wares, cut and polished synthetic stones, leather items, auto parts, ink cartridges, imported toys and alcoholic beverages etc.
  • The prices of fuel are skyrocketing. They will further rise due to an increase in agriculture and infrastructure development cess which is 2.5 per cent on petrol and 4 per cent on diesel.

However, gold, silver, copper, iron, steel, silk and cotton, steel utensils, nylon clothes, and insurance will become cheaper.

Image by Tony-Media from Pixabay (Free for commercial use)

Image Reference: https://pixabay.com/photos/australian-coins-gold-silver-4952628/

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