Here’s a look at these new tax laws:
Reduced time to apply for belated ITR or revised ITR
One can now submit an ITR on March 31 with a late fee, if they have failed to submit their ITR by the date previously issued of July 31. On March 31, one can update their ITR for the same year. The Finance Bill 2021-2022 proposes to reduce this time limit by three months so they will have time to submit their paid ITR or updated ITR until December 31 of the same financial year. There is an effective reduction in the time one gets to install a bound ITR or a revised ITR by three months.
Reversal of tax exemptions for ULIPs if their annual premium exceeds Rs 2.5 lakh. Previously, the Unit Linked Insurance Plan (ULIP) EEE (exempt, exempt, exempt) of the tax-saving tool. That is, it was taxable under all three investment categories (i.e., income tax deductions at the time of investment, income tax exemptions, and income tax exemptions at the time of acquisition under the plan).
Two state tax options
Introduced a new tax regime in the Budget 2020-21 where the taxpayer can choose from, with the lowest tax rates associated with the smallest reduction available and the few exemptions available instead of the general tax where you have to pay higher taxes but you have the right to claim exemption variety and withdrawals. This is the first time you have to use the option of either staying in the old tax regime or moving to a new tax government.
Interest on the employee's share of the EPF's employment from April 1, 2021, will be taxable in the deduction category if it exceeds 2.5 lakh in any year. This will lead to further tax liability, particularly to HNIs, who make higher contributions, and will also disrupt voluntary fund (VPF) donations. If the taxpayer's employer does not contribute to the employee's providence fund then the tax-free limit will be Rs 5 lakh.
Inclusion of deposits in ITR
Individuals acquiring in Indian companies and mutual fund schemes stayed tax-free as the tax was charged on interest or income generated by the company or joint venture until March 31, 2020. However, the 2020 Budget has lifted the wage exemption and made the same tax in your hands. If the amount of the rebate paid to you exceeds Rs 5,000, the company or the fund houses would deduct the tax while depositing the money in the bank account. If any TDS shows up on your 26AS form, you will need to make your dividend income by adding the tax deducted from the share amount credited to your account with the appropriate and direct disclosure of your taxable income.
Therefore concluding it all in simple words, it elucidates that the Union Finance Minister Nirmala Sitharaman presented the Union Budget of 2021 has announced several changes to income tax laws. These changes have taken effect from 1 April 2021. Under the new law, citizens aged 75 and over with pension income and interest from a fixed deposit from the same bank will be exempt from applying to the ITR from April 1. Otherwise, the Minister of Finance has proposed a and higher TDS (source tax) for those who do not submit their ITR and announced to taxpayers who contribute more than ₹ 2.5 lakh annually to an EPF account.