Union Budget 2021: Key Income Tax Announcements

The finance minister Nirmala Sitharaman in the live budget of 2021, has announced various proposals for the benefit of the investors, depositors and taxpayers.

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There are no changes made to the personal income tax. However, senior citizens are offered benefit. Within the proposal, the senior citizen who is above 75 years of age and are earning pension and interest income only need not file the ITR. The intent to do is to reduce the burden on the senior citizens. Moreover, income tax reforms have been simplified further. It has also been proposed to provide GST relief by decreasing the inverted GST structures for, which the government will take the required steps.

The government has also suggested permitting tax exemption upon maturity of ULIP having the annual premium of up to Rs 2.5 lakh. The Employee Provident Fund interest income that is above Rs 2.5 lakh will also be taxable. In the real estate section, there is an additional relief of Rs 1.5 lakh for the home loans in regards to the affordable housing. The homebuyers can easily avail an additional tax relief on the home loans until 2022, March 31.

To reduce uncertainty for the taxpayers and litigation, the government has also reduced the timeframe for reopening the tax cases to 3-years from 6-years. To ease the income tax filing, the capital gains from the listing securities and the interest income will come pre-filled in ITR. The exemption from the tax audit limit to be doubled to Rs 10 crore turnover for the companies that have been doing the business via digital modes. 

It has also been suggested to make the income tax appellate tribunals faceless and also set up the national income tax appellate tribunal centre. For the NRI taxpayers, some relief will be provided from the double taxation in respect their income accrual outside India in the accounts of foreign retirement.

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^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
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