Union Budget 2021-22: 10 changes related to personal finances you should be aware of as a taxpayer
New Delhi | Jagran Business Desk: Presenting the Union Budget 2021-22, Finance Minister Nirmala Sitharaman did not announce any changes in income tax slabs but announced a slew of relief measures, including exemption of senior citizens aged above 75 from filing I-T return if they are dependent on pension or interest income.
Here are 10 key takeaways from Union Budget 2021-22 which you should know as an individual taxpayer and how they affect your personal finances:
- Resident senior citizens, aged 75 or above, who are earning only pension and bank interest income (from the same bank where pension is credited) are not required to file income tax return. On the basis of declaration submitted by such a taxpayer, bank has to compute taxable income and deduct the tax thereon.
- Interest on employee contributions to provident fund over Rs 2.5 lakh per annum would be taxed from April 1, 2021, a move aimed at taxing high-value depositors in the EPF. This will lead to additional tax liability, especially for HNIs, who make higher contributions, and will also discourage voluntary EPF contributions.
- From now, taxpayers will not have to estimate their dividend income while making advance tax payments. Advance tax will now be payable only when dividend is declared or paid by the company.
- Tax return filing has made easier now details of capital gains and interests from banks and post offices would be pre-filled, apart from tax deduction at source. This will help taxpayers file their returns quickly as the data has already been captured.
- The Budget also includes a change in double taxation on NRIs, particularly those who return to India. Sitharaman has also ensured relief for those face difficulty in receiving credit for taxes paid in India.
- Proceeds from ULIPs issued on or after February 1, 2021 will be taxable as capital gains if the amount of premium exceeds Rs 2.5 lakh in any year. When a taxpayer pays premium for more than one ULIP (issued after February 1, 2021), exemption shall apply to those ULIPs where aggregate premium does not exceed Rs 2.5 lakh.
- The Budget also brings relief for those who lost their jobs during the COVID crisis and had to take up freelance work. Sitharaman said social security benefits will be extended to gig and platform workers.
- Tax exemption for afforable housing has been extended further by 1 year. This will benefit middle-class first-time homebuyers who will get enhanced deduction of Rs 1.5 lakh (over and above the existing deduction of Rs 2 lakh) for interest on housing loan for a house valued up to Rs 45 lakh if the loan is taken before March 2022.
- The time limit for filing delayed/revised income tax return has been reduced by three months. Thus, the last date to file tax returns now stands at December 31 after the close of tax year. Similarly, the timeline for completion of assessment has also been reduced by three months.
- Dispute Resolution Committee (DRC) to be set up to help taxpayers with taxable income of up to Rs 50 lakh, and disputed income up to Rs 10 lakh. All proceedings before DRC to be faceless and jurisdiction-less.
Posted By: Abhinav Gupta