Income tax Budget 2021
announcements live: Finance Minister Nirmala Sitharaman did not tinker with
income tax slabs for the financial year 2021-22. No major announcements were made on the Direct Tax front, which will come both as a relief and a dissapointment for the salaried taxpayers.
Budget 2021 did not make any changes to the income tax regime with no change in standard deduction or Section 80C limit. However, on the plus side no cess was announced for higher income tax payers in the COVID era.
Budget 2021 live updates "In order to provide relief to senior citizens who are of the age of 75 years or above and to reduce compliance for them, it is proposed to insert a new section to provide a relaxation from filing the return of income," she said. This relief is subject to the following conditions being met:
1. The senior citizen is resident in India and of the age of 75 or more during the previous year
2. He/she has pension income and no other income. However, in addition to such pension income he may have also have interest income from the same bank in which he is receiving his pension income;
3. This bank is a specified bank. The Government will be notifying a few banks, which are banking company, to be the specified bank; and
4. He/she shall be required to furnish a declaration to the specified bank. The declaration shall be containing such particulars, in such form and verified in such manner, as may be prescribed.
In a boost for homebuyers, Sitharaman announced extending the additional relief of Rs 1.5 lakh for home loans for affordable housing. This additional relief was first announced in July 2019 Budget and was extended in last year's budget to March 2021. Now, the additional Rs 1.5 lakh relief on home loans for affordable housing has been extended for loans taken till March 31, 2022.
Sitharaman said that income tax assessment could earlier be reopened up to 6 years. This time limit has now been reduced to 3 years. "In serious tax evasion cases as well, only where Rs 50 lakh or more has been concealed, the assessment can be reopened up to 10 years and that too after the consent of Principal Chief Commissioner," she said.
It was also announced that the delayed contribution of EPF by the employer for employee will not be allowed as a deduction to employer.
Sitharaman has announced an investor charter for investor protection across financial products. The deposit insurance scheme was increased to Rs 5 lakh from Rs 1 lakh last year. The Finance Minister said that the provision will be streamlined so that troubled bank depositors can get access to their deposits to the extent of their deposits.
Talking about Sitharaman's announcements on the Direct Tax front, Grant Thornton Bharat CEO Vishesh Chandiok said, "It is wonderful to see no surprises on Direct tax rates & a commitment to simplification, dispute resolution and enhancement of the compliance limits where possible."
Last year, Sitharaman announced a new optional income tax regime for tax payers that lowered tax rates but also did away with income tax exemptions like standard deduction, Section 80C etc.
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