Important changes to the income tax law in 2021

0
  1. Mandatory link between PAN and Aadhaar

The CBDT has notified the deadline to link your permanent account number to your Aadhaar number. The deadline for linking the permanent account number (PAN) to Aadhaar has been extended until June 30, 2021. According to reports, the government may take a strong stand against taxpayers who did not like their PAN with Aadhaar. Additionally, the report further states that if an employee fails to associate PAN with an Aadhaar card by June 30, the company will not credit their salary for the following month.

The Ministry has made the tax return filing process (ITR) easier for taxpayers by providing the pre-filled tax return for certain categories. The option of pre-filled RTI forms is available on the new website. Taxpayers will be able to proactively update their profile to provide certain income details, including salary, home ownership, business or occupation, which will be used to pre-populate their ITRs.

Central Commission on Direct Taxes (CBDT) Chairman Pramod Chandra Mody said the budget provision which makes taxable interest on employee contributions exceeding 2.5 lakh rupees per year to the Employee Provident Fund (EPF ) will also be applicable to all government employees covered by the Caisse Générale de Prévoyance (GPF).

The Central Council of Direct Taxes (CBDT) issued the circular concerning the use of functionalities under Articles 206AB and 206CCA of the Income Tax Law of 1961. The Finance Law of 2021 inserted two new articles 206AB and 206CCA in the Income Tax Act 1961 which takes effect from July 1, 2021. These articles impose a tax deduction (article 206AB) or a tax collection (article 206CCA) at a higher rate in the case of certain non-declarants (specified persons) with regard to tax deductions (other than under articles 192, 192A, 194B, 194BB, 194LBC and 194N) and tax collections. The higher rate is double the prescribed rate or 5%, whichever is greater. A specified person means a person who meets both conditions.

Section 139 of the Income Tax Act governs the filing of income tax returns by anyone whose income exceeds the ceiling for the basic exemption. However, the 2021 Union budget, in order to alleviate the compliance burden for filing returns, exempted people over the age of 75 from filing income tax returns, subject to various conditions.

The government introduced an LTC / LTA cash voucher system to allow LTC / LTA eligible employees to request tax-exempt reimbursement of similar amounts subject to certain spending limits and conditions. This was done because employees cannot travel due to the coronavirus pandemic.

Interest on the employee’s share of the Employee Provident Fund (EPF) contribution from April 1, 2021 will be taxable at the withdrawal stage if it exceeds 2.5 lakh in a year. This will lead to an additional tax liability, especially for high net worth individuals (HNIs) who make higher contributions, and will also discourage contributions to the Voluntary Provident Fund (VPF). This, together with the imposition of aggregate employer contributions above 7.5 lakh to EPF, NPS and superannuation fund and related interest introduced last year, may turn EPF into a scheme. retirement even less attractive.

The government has extended by one year the additional tax deduction of 1.5 lakh on interest paid on home loans for the purchase of affordable housing until March 31, 2022. The additional deduction of 1.5 lakh of Rs in addition to ₹ 2 lakh was introduced. in the 2019 budget. This was allowed for first-time home buyers and at a cost of up to 45 lakh.

With effect from April 1, 2021, the 2021 finance bill inserted the new chapter, namely the Dispute Settlement Commission. The central government has deliberately adopted a policy of making the processes under the law, which require an interface with the taxpayer, completely anonymous. In this context, new systems of anonymous evaluation, anonymous appeal at commissioner level (appeals) and anonymous imposition of sanctions have already been made operational. In addition, the Taxation Act 2020 and other laws (relaxation and modification of certain provisions) empowered the central government to introduce similar regimes for other functions performed by tax authorities.

  1. Filing form 10-IE to opt for a new tax regime

To opt for a new tax regime for individuals and HUFs in accordance with Article 115BAC of the Income Tax Act, the taxpayer will have to complete Form 10-IE no later than the filing due date of ITR u / s 139 (1) of income tax. Act.

Support our journalism by subscribing to Taxscan without advertising. follow us on Telegram for quick updates.



Source link

Share.

About Author

Comments are closed.