New Financial year begins with new changes on income tax rules.

Sponsored Links
  • The new financial year began on April 1, 2021 with new changes on the income tax rules.
  • These changes were announced by the Union Finance Minister Nirmala Sitharaman during the 2021 Union Budget itself upon a decision to get it effected from the first of April, 2021, Thursday.
  • The interest earned on employee’s contribution above ₹2.5 lakh in a year will be taxable from this month.
  • Buying a pension cover will become easier.
  • From changes airfare to standard insurance policies, all the various norms will get into the effect from the given date.
  • Further, in case there is no contribution by the employer to the EPF account (usually in case of government employees), then interest will be tax-exempt for the deposits up to Rs 5 lakh in a financial year.Thus, in the new financial year to avoid tax on the PF interest, ensure that the deposits in your EPF account do not exceed the specified limits mentioned above.
  • Check down below 8 important norms that will be effected measurably upon the release of the new income tax guidelines.
Sponsored Links

8 new important ITR rules are as follows:

  • Price per LPG cylinder willbe reduced by Rs. 10/-
  • The price for domestic cooking gas (LPG) is enabled to get decreased by 10 Indian Rupees per cylinder from the given date onwards.
  • Some of the well-known Petroleum corporations such as Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation have already taken action regarding the reduction and followed the rules presented by the government.
  • In Delhi and Mumbai, a 14.2 kg non-subsidized LPG cylinder will now cost around 809 INR that was previously 819 INR.
  • Similarly, the present cost availability in Kolkata shall be 835.50 INR whereas in Chennai, it will be 825 INR.
  • Prices for air ticketswill get costlier
  • Starting from this month, air travel will become costlier.
  • The Aviation regulator Directorate General of Civil Aviation (DGCA) has hiked air security fee (ASF).
  • While the rise in ASF for domestic passengers is of ₹40, for international passengers, the rise is of ₹114.38.
Sponsored Links
  • No advance tax penalty on dividend income
  • If there is a shortfall in advance tax instalment or failure to pay the same on time due to dividend income, then no penal interest shall be charged under section 234C of the Income-tax Act subject to certain conditions.
  • This rule comes as a relief for tax payersas the dividends become taxable in the hands of individual from April 1, 2020.
  • Option to choose ‘New tax regime’ instead of Old tax regime
  • The government had implemented the new tax regime last year in Budget 2020.
  • The exercise of choosing one of the tax regimes for FY 2020-21 will be required to be made starting from 1st of April 2021.
  • Taxpayers still have time until 31st March 2021 to make tax-saving deductions, however, they will be able to opt for a beneficial regime at the time of filing their tax returns for FY 2020-21.
  • Saral Pension policy
  • On special order from the Insurance Regulatory and Development Authority of India (IRDAI), all life insurance companies have to mandatorily offer a standard individual immediate annuity product from April popularly known as the Saral Pension Policy.
  • This plan will provide a minimum annuity of ₹1,000 per month, ₹3,000 per quarter, ₹6,000 per half year, and ₹1,2000 per annum.
  • The minimum age limit for purchasing this plan is 40 years and the maximum is 80 years.
  • This will be a single premium, non-linked non-participating immediate annuity plan.
  • Standard personal accident insurance policy
  • A standard personal accident insurance product called Saral Suraksha Bima will offer a minimum sum insured of ₹2.5 lakh.
  • It has already been commenced from 1 April.
  • Under this policy, the maximum sum insured will be ₹1 crore.
  • Sum insured offered should be in multiples of ₹50,000,offering on their own beyond the mentioned range.
  • Anyone over 18 years old can buy this policy. The maximum age at entry is set at 70.
  • Senior citizens above 75 years exempted from filing ITR
  • Senior citizens above the age of 75 years, who only have pension and interest as a source of income will be exempted from filing ITR, starting from 1 April, where the interest income is earned in the same bank where pension is deposited.
  • The exemption will be available to only those senior citizens who have no other income but depend on pension and interest income from the bank hosting the pension account.
  • Tax benefits on Unit-Linked Insurance Products (ULIP)
  • The maturity gains in Unit Linked Investment Plan (ULIPs) would be taxed only if the annual premiums are equal to or above ₹2.5 lakh.
  • Earlier the taxation rates were absolutely free. But now after the Budget 2021, the rate will be 10% if it a long-term gain and if it is a short-term gain, the rate will exceed to 15%.
  • This will impact only for those ULIP policies which are bought after 1 February, 2021.
  • For those who pay annual premiums below ₹2.5 lakh, they would still get the tax-exemption benefits.
Sponsored Links

Leave a Reply

Your email address will not be published. Required fields are marked *