In a relief to senior citizens, finance minister Nirmala Sitharaman announced that no income tax filing required for seniors citizens above 75 years of age and have income only from pension and interest income in the Budget 2021. The aim is to reduce the compliance burden on the elderly people, finance minister mentioned. There was no major changes in the direct tax front in the Union Budget 2021.
Presenting the Budget 2021, Sitharaman said, “We shall reduce the compliance burden on our senior citizens who are 75 years of age & above — for senior citizens who only have pension and interest income, I propose exemption from filing their Income Tax return.”
In a boost real estate sect, finance minister extended the additional relief of ₹1.5 lakh for home loans for affordable housing. The scheme was first announced in July 2019 Budget. Later finance minister extended the period till March 2021. Now, homebuyers can avail additional tax relief on home loans till 31 March, 2022.
he central government also reduced the timeline for reopening tax cases tox three years from six years. “Backed by data and analytics, this is a step in the right direction. It demonstrates the intent to reduce litigation and uncertainty for taxpayers. This was much needed,” commented Ritesh Kumar, Partner IndusLaw.
In order to rationalise tax exemption for the income earned by high income employees, Budget 2021 proposed to restrict tax exemption for the interest income earned on the employees’ contribution to various provident funds to the annual contribution of ₹2.5 lakh. This restriction shall be applicable only for the contribution made on or after 1 April, Sitharaman announced.
“EPFO is for welfare of workers and workers will not be affected by this move. It is only for big ticket money which comes into EPFO which has tax benefit and also assured 8 per cent return,” Sitharaman said while addressing the post-budget press conference.
“In serious tax evasion cases as well, only where ₹50 lakh or more has been concealed, the assessment can be reopened up to 10 years and that too after the consent of principal chief commissioner,” finance minister announced.
Pre-filled income tax returns with details on capital gains from listed securities, dividend income and interest income from banks and post offices would be available soon, finance minister said.
The non-resident Indians (NRIs) would be spared from double taxation, she added, finance minister added. “The Finance Minister mentioned to provide some relief from double taxation for NRI taxpayers in respect of their income accrual outside India in the foreign retirement accounts,” said Parizad Sirwalla, partner and head, global mobility services- Tax, KPMG in India.
Government also proposed to reduce time allowed to re-open tax investigation to 3 years against the existing six years. Exemption from tax audit limit doubled to ₹10 crore turnover for companies doing most of their business through digital modes, finance minister added. The central government also proposed to make income tax appellate tribunals faceless and set up national income tax appellate tribunal centre, finance minister said in Union Budget 2021.
“Backed by data and analytics, this is a step in the right direction. It demonstrates the intent to reduce litigation and uncertainty for taxpayers. This was much needed,” said Ritesh Kumar, partner, IndusLaw.
Commenting on the Budget 2020, Archit Gupta, founder and chief executive officer – ClearTax said, “The good thing about the Budget is that there is no increase in tax rates announced so far in the speech. There is significant relief in compliance for small companies with the companies act as well as with compliance for tax audits for small businesses. Relaxation in advance tax compliance for those who earn dividend income will make things easy for shareholders. With pre-filling of ITR, the focus seems largely on easing compliance for taxpayers.”
