Hi everyone! Welcome to my podcast. This is Kalyani Chaudhari from Pocket HRMS. February was kick-started by the Union budget 2021 which was presented on 1st Feb 2021 by our Finance Minister Nirmala Sitharaman. She left direct tax rates unchanged, and the ‘get-well’ budget laid much-needed emphasis on the healthcare and infra sectors.
For those of you who missed our Finance Minster’s 110-minute long presentation, I have accumulated the top 10 Income tax changes announced in the Union Budget 2021-22 which we will be discussing today. So, let us begin-
1. Relief to senior citizen– One of the most important changes in the tax budget that our honourable Finance Minister introduced is the exemption of filing income tax return for senior citizens, i.e., age 75 and above who only have passive income, which means pension and interest income.
2. Reassessment of old cases– This key budget proposal aims to amend section 148 of the Income Tax where the limit for reassessment has been reduced from 6 years to 3 years. This proposal also addresses serious tax evasion, in cases where tax evasion amounting to Rs.50 lakhs or more can be re-opened within 10 years.
3. Dispute resolution committee (DRC) – The budget proposed to set up a Dispute Resolution Committee to help small taxpayers resolve tax matters easily. Anyone with total income less than 50 lacs and disputed income less than 10 lacs can approach this faceless committee. Further, DRC will have power to waive or reduce any penalty and grant immunity to the assesse.
4. Faceless ITAT Centre– After success of faceless assessment, a faceless Income Tax Appellate Tribunal or ITAT centre will be set where personal hearings will be conducted through Video Conferences, as required.
5. Threshold limit for Tax Audit– There will be No Tax Audit for taxpayers having turnover up to 10 crores from the earlier limit of 5 crores. This proposal would only be implemented for taxpayers having at least 95% transaction digitally.
6. Relaxation on Advance Tax on Dividend– This budget proposes to make it easier for taxpayers to calculate and pay advance tax on dividend income.
7. Relaxation Deduction under section 80 EEA- Affordable housing 1.5 lac deduction will now be available for loan taken till 31/3/2022, whereas earlier it was 31/03/2021.
8. Developer of Rental housing project– Budget also extended incentive provided under 80IBA which was extended from 31/03/2021 till 31/3/2022.
9. Pre-filled income tax return– To facilitate seamless filing of income tax for taxpayers, income tax returns will have pre-filled data regarding Dividend, post office interest income, salary, etc.
10. Withdrawal of deductions on late deposit of PF contribution– Late deposit of employee contribution of PF will now be not allowed as deduction to employer.
So these were the top 10 key changes proposed in the Union Budget 2021. The budget provided relief to senior citizens and has proposed formation of a new dispute resolution committee for seamless resolutions of tax matters. Faceless ITAT is the next step for Digital India and helping tax payers with pre-filled IT returns is definitely a great decision. In conclusion, I would like to say that when the requirements are asymmetric- with some people being affected more than others- the relief has to be targeted, and not general. That brings us to the end of this podcast. Thank you everyone for listening to this podcast and stay tuned for my next one! Until then, this is Kalyani Chaudhari from Pocket HRMS, signing out.