Blog Read

Recent updates: Income Tax

Recent updates: Income Tax

Contents  hide 

1 Introduction

1.1 Section 206AB and 206CC

1.2 Related

Introduction

  • The Budget 2021 has proposed provident fund contributions of over Rs. 2.5 lakh a year. As per clause 5 of Finance Bill 2021, the proposed to insert the proviso under Section 10 (11) and 10 (12)- provides an exemption for the statutory provident fund and recognized provident fund respectively. Employee provident fund account (EPF) is an opportunity to tax the deposits in that EPF which fall under the Exempt, Exempt, Exempt (EEE) tax category then
  • an employee needs not to pay taxes for these three levels – investment, earning, and withdrawal.
  • The Budget 2021 added a new section 194P conditional giving the relaxation for senior citizens who is the age 75 years or above from filing Income Tax Return.
  • The Income tax slab for FY 2021-22 is same as that of FY 2020-21. The last time where tax rate is lower on flat you cannot claim any tax exemption such as 80C, 80D etc in this.

Equalization levy expanded its ambit by providing:

a) Wider range of online sale of goods/ provision of services

 b) Consideration on which the levy applies

For Startups Tax holiday extended its regime for those incorporated up to 31 March 2022; capital gains also provided exemption on investment in startups extended to 31 March 2022

On ULIPs with a premium amount of 2.5 Lakh per annum or more, the maturity amount, which was earlier tax-free under Section 10(10D) of the Income Tax Act, will now be taxable,

now onwards ULIP would attract 15 percent short-term capital gains tax (STCG) or

10 percent LTCG depending on the holding period.

On ULIPs with a premium amount of 2.5 Lakh per annum or more, the maturity amount, which was earlier tax-free under Section 10(10D) of the Income Tax Act,

will now be taxable, now onwards ULIP would attract 15 percent short-term capital gains tax (STCG) or

10 percent LTCG depending on the holding period.

Section 206AB and 206CC

have been insert to provide for a higher rate for TDS and TCS, respectively,

new tax deduction at source (TDS) at 0.1% introduced for payments

by the person who has purchased goods from a resident seller.

  • Section 80-IAC of the Act provides for a deduction of 100 % of the profits of an eligible start-up for three consecutive assessment years out of ten years at the option of the assessee. This subject will only be applicable for the start-up between the 1st day of April, 2016 but before 1st day of April 2021.
  • Section 44ADA provides for presumptive taxation. The amendment has been propose in section 44ADA specifying the assessees on which this section shall be applicable in the case of an individu­al, HUF, and Partnership firms other than LLP.
  • Section 271AAD of the Act was inserted has widen to impose penalty on a person or a person who causes such person to make a false entry or any sort of omit an entry on the books of accounts.
  • section 139(9), certain situations are prescribe ,if there is a non-compliance while filing the ITR, it makes
  • the ITR defective and
  • if that could not be recti­fy within 15 days from intimation by the Tax department, such defects result to return as invalid. 

The Finance Bill, 2021 (“FB2021”) has proposed a ‘retroactive’ amendments in the provisions of S. 45(4) of Income-tax Act 1961 (“ITA”),

with the intent to put these controversies to rest and

bring certainty to the tax treatment on aspects open to varied interpretations.

Comments

Drop your comment