Financial year 2020-21 gives a fresh start to the Indian Economy through new rules and guidelines which will affect the pocket of Individual taxpayers the most. Most of the rules introduced by the income tax department have already been effective since the day one and some of them are yet to be applicable from date given.
Here are the Rules that will affect the individuals:
- Last date for Filing Belated and Updated Income Tax Return is December 31, 2021: As we know that the last date for filing income tax return for any financial year is 31.03.20XX. But for Financial Year 2020-21 this date has been reduced by 3 months. For Instance Last date for filing belated return for financial year 2019-20 was 31st march, 2021. This rule is not only advisory but mandatory in nature as along with rule applicability penalty of Maximum upto Rs.10,000/-. So it is advisable to file your income tax return on or before due date which is 31st December 2021.
- Modification in the Interest rate of PF (Provident Fund): For the Financial Year 2020-21, it is to be taken into consideration by individual tax payers while investing in the Provident Funds. What to be taken care is that, to ensure the tax savings on the provident funds. For Financial Year 2020-21, Individual must take care that maximum amount of deposit in EPF Account does not get exceeded by Rs 250,000 in the Financial Year 2020-21. If it does the ministry of finance may make the lower the burden of tax payers by exemption.
- TDS Filings will be increased: Income tax department considering in raising the rates for TDS (Tax Deducted at Source) or TCS (Tax Collected at Source). This raise in income tax will be done by introducing some new sections which are 206AB and 206CCA and will be termed as special provisions as these are relevant for a particular financial year only.
But there is a catch for these provisions as these will be applicable for those entities who do not file their income tax returns. It has been clarified by the professionals that the non-Return filing entities will be paying a minimum of 5 percent TDS or TCS. The responsibilities for individual deductor to get the ITR done for filing as well as furnishing.
- New Income Tax Return Forms Advance Filled Up: Earlier the Gross Income Details along with any deductions which the Assessee is allowed. Now this work of individual tax payers has done by income tax department. The ITR Form will be auto populated with the help of Form 16 and Assessee just have to click the submit button on the portal to file income tax return. Although the details which are not available in the form 16, will have to be filled by Assessee in the utility. Not only the Salary Income, but Assessee can expect the details of income such as Capital Gains from listed securities, Interest on Bank deposits, Post Office Deposits, Income by way of Dividends etc.
Person age more than 75 years need not to File Income Tax Return: In the Finance Act 2021, Honorable Finance minister Nirmala Sithraman has brought the new return filing process and an exemption for the super senior citizens. However, Assessee of this category have to file return if income earned by the Assessee is by way of pension or interest on pension while having no other source income.