KEY CHANGES IN INCOME TAX EFFECTIVE FOR FY 2021-22

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KEY CHANGES IN INCOME TAX EFFECTIVE FOR FY 2021-22

 

 

  1. TDS on Purchase:

    A new TDS section 194Q will be effective from 01-July-2021, which requires businesses exceeding turnover of Rs. 10 Cr to pay 0.1% TDS on purchase of goods. If the supplier does not provide PAN/Aadhar, then the rate would be 5%

  2. No Tax Filing For Senior Citizens Above 75 years of age:

    Persons whose age is above 75 years and who has pension income and interest from fixed deposit comes in the same bank and who has only interest income, they need not file income tax return. Bank will deduct the income tax which he has to pay and deposit to the government. The condition is the person should have only pension income and interest from fixed deposit should accrue in the same bank.

  1. Tax on Interest on PF:

    Interest earned from the Providend fund is exempt from Income Tax. However, FA 2021has made Interest on Employee Contributions to Providend fund over Rs. 2.5 lakhs as Taxable.

  2. Penalty for Non-Linking of Aadhar & PAN:

    The Due Date for linking Aadhar and Income Tax PAN was 31st March 2021. In case of non-linking, your PAN Card would become inoperative. In case of Non-Linking, taxpayer will be liable for Fine of Rs. 10,000 as per Section 272B of the Income Tax Act.

  1. Submission of bills under LTC Cash Voucher Scheme:

    To avail the tax benefit under the LTC Cash Voucher Scheme, ensure that required bills in the correct format containing GST amount and GST number of the vendor have been submitted to the employer (provided the employer is offering the scheme) on or before March 31, 2021.
    As per the scheme, an employee is required to spend three times the amount deemed as LTA fare on goods and services attracting GST of 12% or more.

  2. Pre-filled ITR Forms

It is one of the key change in ITR Form as announced by in the Budget 2021 . The concept of Pre Filed ITR form is further widened.
Now, the Prefilled ITR Forms will have information of Capital Gains from Listed Securities, Dividend Income, Interest from Banks/Post Office, etc.
Earlier Pre-filed ITR form was available for Salaried employees where Income was reflected on basis of Form 16. However, now the scope has been widened so as to include dividend and capital gain from shares and mutual fund as well.

  1. High TDS/TCS Rate for Income Tax Return (ITR) Non-Filers:

    New section 206AB is added in the Income Tax Act so as to provide for higher rate for TDS for the non-filers of income tax return (ITR). This new section provides for Rate on Non-Filer as higher of the following:
    a) 5%
    b) twice the rate specified in the relevant provision of the Act
    c) twice the rate or rates in forc.

 

Similarly, a new sec 206CCA has been inserted in Income Tax Act as a special provision providing for higher rate for TCS for the non-filers of income tax return (ITR). The Proposed Rate on Non-Filer is higher of the following:
a) 5%
b) twice the rate specified in the relevant provision of the Act

 

 

 

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