Finance Minister Nirmala Sitharaman has presented the Union Budget for F.Yr.2021-22 on 1st Feb.2021.
The key direct tax proposals in the budget speech are as under :
1. Relaxation to Senior Citizens above 75 years of age from filing of ITR if certain conditions are met -
If the senior citizen above 75 years of age have only pension income and bank interest and that too in one bank only, he/she will not be required to file the IT return anymore. The bank will deduct TDS if applicable from the total income and a new section 194P has been inserted to enforce bank to deduct TDS. This comes as a big relief to senior citizens above 75 years.
2. National faceless Appellate Tribunals will be created
Just as the faceless assessment and faceless CIT(A) centres have already been created, now the Appeals to the Appellate Tribunals will also be faceless. This will go a big way in reducing compliance cost, ease of representation and also increase transparency.
3. Creation of "Dispute Resolution Committee"
For assesses having taxable income more than Rs.50 lacs and disputed income above Rs.10 lacs will now have an option to go to Dispute Resolution Committee to settle their disputes at early stage and avoid further litigation. For this purpose a Dispute Resolution Committee will be created.
4. Pre-filled details in IT returns are extended to include more details
Earlier the IT returns were coming up with pre-filled details such as salary, TDS etc. Now this facility has been further extended and the IT returns will come with pre-filled details of capital gains relating to shares, dividend income, income from bank and post office accounts etc.
5. PF deduction will not be allowed if not deposited
Any employer who deducts PF of an employee but does not deposit the same to the account of Govt. will not be allowed the deduction of that amount.
6. Section 44ADA amendment
Earlier Section 44ADA benefits i.e. declaring of 50% of income from specified profession was available to every taxpayer.
Now the same will be restricted to Individual, HUF and partnership firm (not LLP).
7.Extension of Section 80EEA deduction for 1 more year
The deduction u/s 80EEA which was available till 31st March,2021 has been extended till 31st March,2022 i.e. for one more year. This applies to interest paid for acquiring house property under affordable housing schemes.
8. Reduction in time limit of Re-opening of Assessments
Earlier, the income escaping return assessments were allowed to be re-opened for 6 Asstt. years. Now this time limit has been reduced to 3 years which is a big relief. Only in cases where the tax evasion is of more than Rs.50 lakhs can be re-opened up to 10 years which is also after taking prior approval from Chief Commissioner of Income Tax.
9. Interest on PF above 2.5 lakhs will be taxable
Any interest earned in PF account on contributions made above Rs.2.5 lakhs in a year will be taxable now.
