Major Income Tax Proposals in Budget 2021
1. No Income tax returns for senior citizen of 75 year or above age where the total income consist only of pension and interest income
2. Income tax returns will have prefill data of capital gains from listed securities, post office interest, Interest income, Salary etc,.
3. Increase in tax audit limit from Rs. 5 crore to Rs. 10 crore if more than 90% transactions are made digital mode and increase in tax Audit Exemption Limit for NRIs who carry out 95% of their transaction digitally, to Rs. 10 crores
4. Introduction of Faceless for Income tax appellate tribunal. A National Faceless Income Tax Appellate Tribunal Center to be constituted, wherein all communication between the Tribunal and the Appellant shall be electronic. Where a personal hearing is needed, it shall be done through video conferencing only.
5. Constitution of a Dispute Resolution Committee, which will be faceless to ensure transparency, efficiency, and accountability. Anyone, with a taxable income of up to Rs. 50 lakhs and disputed income of up to Rs. 10 lakhs shall be eligible to approach the committee
6. In case of serious fraud, when there is evidence of concealment of income of 50 lakh or more in a year, can the assessment be reopened up to 10 years. This can be done only after the approval of the Principal Chief Commissioner.
7. To enable deduction of tax on dividend income at lower treaty rates for FPIs
8. In order to provide relief to taxpayers earning dividend income advance tax on dividend shall arise only after it is declared
9. Deduction for affordable housing loan of Rs. 1.5 lac will now be available for loan taken till 31.3.2022.
10. Tax incentive of affordable renting housing project
11. Exemption under section 10(23C) increased from Rs. 1 crore to Rs. 5 crore for educational institutions and hospitals
12. Late deposit of employee contribution of PF will now be not allowed as deduction under the head Income from business and profession
13. Extension of deduction under section 80IBA for Affordable housing scheme projects to 31/03/2022
14. Reopening of assessment:
In normal cases: the time limit has been reduced to 3 years from 6 years
In serious tax evasion cases: can be reopened till 10 years, only when
concealment of income is more than 50 lakh
This is a preliminary and quick review of Income Tax Proposals… We will soon post a detailed review on the same.
15. Interest earned on annual PF contribution exceeding 2.5 lacs from April 2021 will now be taxable