Income tax rule changes that will come in place from April 1

There is only one day left for the financial year to end. Many changes are going to kick in from 1 April. Some of these changes are according to the announcements made by Finance Minister Nirmala Sitharaman in Union Budget 2021, while others are important tasks that taxpayers need to complete by 31 March. So, let’s take a look at income tax rule from April 1

1) Last date to file ITR

31 March is the last date for filing Income Tax returns for Financial Year 2019-20. This deadline has already been extended multiple times because of the Covid-19 pandemic. Those who have not yet filed their returns will have to pay a late fee to do it by tomorrow.

2) PAN-Aadhaar card linking

March 31 is the last date to link your PAN card with Aadhaar. If you fail to do so, your PAN will become inoperative and you might have to pay a fine of Rs 1,000.

3) Last day to make a tax saving investment

Although tax-saving investments are done at the starting of the calendar year some people leave it for the last minute. The last date for this purpose for FY 2020-21 is March 31. You can invest in several instruments to save tax.

4) New PF tax rule

Finance Minister Nirmala Sitharaman increased the deposit threshold limit to ₹5 lakh per annum in the provident fund for which interest would continue to be tax-exempt if there is no employer contribution.

5) TDS rule change

Those not filing their ITR will have to pay a higher TDS (tax deducted at source), TCS (tax collected at source) from 1 April. This provision was announced in Budget 2021.

6) New ITR rule for senior citizens

Senior citizens above 75 years of age will be exempted from filing income tax returns. This facility will be available to only those senior citizens who have no other income other than pension and interest income. This was announced in the Union Budget 2021 and will come into effect from 1 April 2021.

7) Pre-filled ITR Forms

In the new Financial Year, the Income Tax Department will provide pre-filled Income Tax Returns (ITR) form which will include transaction details of individual tax filers like capital gains, dividend income and interest income will soon become a standard of the pre-filled Income Tax return (ITR) form.

8) LTC

For the year FY2021, the Budget notified tax exemption to an employee receiving a cash allowance in place of Leave Travel Concession (LTC). Announced by the government in 2020 for employees who were not able to claim their benefits due to COVID restrictions.

9) Option to choose ‘New tax regime’ instead of Old tax regime

The government had implemented the new tax regime last year in Budget 2020. However, the exercise of choosing one of the tax regimes for FY 2020-21 will be required to be made starting from 1st of April 2021.

10) Vivad se Vishwas Scheme: Payment deadline

The Income Tax Department had extended the deadline for filing declarations and making payment under the direct tax dispute resolution scheme Vivad Se Vishwas till March 31 and April 30. “CBDT further extends the date for filing of declarations under the #VivadSeVishwas Act, 2020 to 31st March 2021. Date for payment without additional amount under VsV extended to 30th April 2021,” the I-T department tweeted.

Also Read | Old income tax vs new income tax: Which one to choose?