Major changes in income tax rules effective from April 1: Details heretext_fields
As the new financial year begins, several new tax rule changes are coming into effect from today ( April, 1). These include income tax on crypto assets, filing of updated returns, new tax rules on EPF interest, tax relief on Covid-19 treatment etc.
Here's a rundown of new things to keep in mind this financial year:
•Updated filing of ITR: A new provision will give taxpayers an additional opportunity to update their Income Tax Returns for any errors or mistakes made. Individuals will be able to file any updated return within two years from the end of the relevant assessment year.
•Crypto tax: Beginning April 1, cryptocurrency gains will be taxed at 30%, which is the highest tax bracket, with a rate that is the same as lottery winnings. From Bitcoin to non-fungible tokens (NFTs), this tax rate would apply to all virtual digital assets (VDAs) and their earnings.
This includes gifts in the form of cryptocurrency as well. Further, the government has introduced norms by disallowing losses incurred in one virtual digital asset to be set off against an earning in another.
•Tax on EPF account: The Central Board of Direct Taxes (CBDT) has decided to change the Employee's Provident Fund (EPF) rules and tax-free cap contributions of up to Rs 2.5 lakh. The EPFO will maintain two different accounts: One for non-taxable and one for taxable. And any contribution over and above (including principal, will be taxable and not just the interest).
•Tax relief on Covid-19 treatment expenses: As per the Press Release on June 2021, tax exemption has been provided to persons who have received money for Covid medical treatment. Likewise, money received by family members on the death of a person due to Covid will be exempt up to Rs. 10 lakhs for family members if such payment is received within 12 months from the date of death. This amendment will be
•Change in Long Term Capital Gains: Currently, there is a maximum surcharge of 15 per cent on long term capital gains on the sale of listed equity and mutual funds. After the changes, however, this maximum percentage will be extended toward all assets.
•Senior citizens aged 75 years and above exempted from filing Income Tax Returns: Any senior citizen above the age of 75 will be exempted from filing income tax returns with the condition that a declaration must be given to the bank that the individual uses. Further, the senior citizen is only exempted from filing if certain conditions are fulfilled.
•Non-KYC (Know Your Customer) compliant bank accounts to have restrictions: Individuals whose bank account is not KYC compliant will not be able to operate their bank account from April 1, 2022. Restrictions will be placed on cash deposits, cash withdrawals etc.
•Pradhan Mantri Vaya Vandana Yojana interest rate reset: The interest rate of the Pradhan Mantri Vaya Vandana Yojana is always reset annually. The new rates are expected to be announced on April 1. In 2020-2021, the rate was 7.4 per cent per annum, and it has remained unchanged since then.