This year there are changes to income tax system of Indiawhich affect common people like you and I. Also, two weeks are left for thechange in financial year, and this is good time to know and update about thechanges.
1. Following the so-called progressive tax concept (in whichthe wealthy are taxed more than those who are able to report less income), thegovernment has decided to tax high-value depositors in employee provident fund(EPF).
If your contribution to EPF is more than ₹2.5 lakh, then theinterest on the same will be taxed.
The rationale presented by the government is that thischange is for the welfare of the workers.
2. More taxation at source i.e. more TDS (Tax Deducted atSource) and TCS (Tax collected at Source). To recover these, the person has tofile income tax return (ITR).
The reason presented for this action is that the governmentthinks this will encourage return filing and thus bring more and more incomegeneration under the purview of the government.
3. No tax filing for senior citizens aged above 75 years.
The government, in this move, wants to relieve the filingburden on a certain section of the common people.
However, there is a qualifier. Only those senior citizenswho earn only from pension and interest income are eligible to this relief.
4. Leave Travel Concession (LTC) to have facility of taxexemption to cash allowance.
The reason behind this move as presented by the governmentis to encourage spending by government salaried individuals.
5. To make the tax filing convenient, the process has beenupdated to pre-fill ITR forms.
The details which will be pre-filled include salary income,tax payments, TDS, etc.
Further, details like capital gains from listed securities,dividend income, and interest from banks, post offices, etc too will bepre-filled.
So, dear taxpayers get ready to abide by the old and the newrules from April 1, 2021.