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Union Budget 2021-2022: Things You Should Know As A Taxpayer.

On Monday, the Union Budget 2021, proposed by Finance Minister Nirmala Sitharaman, did not announce amendments to individuals’ income tax slabs, leaving them dissatisfied. She did, however, announce several tweaks to the laws on income tax that could interest taxpayers. That includes, among others, unit-linked insurance plans (ULIP), the donation of employers to the provident fund for persons in the high-income class, and the convenience of filing income tax returns for senior citizens.

Here are few things revealed in Budget 2021 for income tax changes:

1. While making advance tax contributions, investors would not be forced to forecast their dividend revenue. Advance tax will now only be due whether the corporation reports or pays a dividend. This would save the taxpayer from paying interest due to underestimation when paying advance taxes.

2. Some relief for senior citizens! Resident seniors aged 75 or over who receive the only pension and bank interest income (from the same bank where the pension is credited) are not allowed to file income tax returns. On the basis of a document made by such a taxpayer, the bank is allowed to measure the gross income and subtract tax from it.

3. At the withdrawal point, interest on the employee’s share of the donation to the EPF on or after 1 April 2021 will be taxable if it exceeds Rs 2,5 lakh in any year. This will result in increased tax responsibility, especially for HNIs making higher donations, and will also prevent voluntary contributions from the EPF. This may make EPF an even less appealing retirement plan, along with the taxation of gross company contributions in excess of Rs 7.5 lakh to EPF, NPS and the superannuation fund and interest on it introduced last year.

4. Because more is great! In addition to wage revenue, savings statements, tax receipts and TDS records, pre-filled income tax reports will now contain information on capital gains from listed shares, dividend income, bank interest, post office, etc.

5. Strong news for people with retirement savings abroad! The central government will announce rules to decide the manner and year of taxability of international retirement fund income opened by a resident taxpayer while living in a foreign country, offering relief from difficulty faced due to double taxation due to mismatch in tax timing in different countries.

6. The Committee for Dispute Resolution (DRC) is to be formed to assist taxpayers with a taxable income of up to Rs 50 lakh and contested income of up to Rs 10 lakh. To be faceless and jurisdiction-less in all proceedings before DRC. This would reduce lawsuits and offer resources for small and medium-sized taxpayers to resolve initial-stage disputes.

7. Affordable accommodation – expansion on the extension! Further extension of the tax exemption for subsidised housing by 1 year. This would help first-time homebuyers of the middle class who will get an improved deduction of RS 1.5 lakh (over and beyond the present deduction of Rs 45 lakh if the loan is taken before March 31, 20222 (earlier March 31, 2021).

8. The time period for filing the overdue (belated) / amended return on income tax is shortened by 3 months: the last date for filing the return on income tax is now 31 December following the end of the tax year. Similarly, the period for review implementation was shortened by 3 months. Although this decreases the total deadlines for tax enforcement, it will cause logistical challenges for taxpayers with foreign income to obtain tax exemption or relief if those incentives are contingent on tax filling in the other country.