Under the Income-tax (25th Amendment) Rule 2021, the Central Board of Direct Taxes (CBDT) will implement essential modifications to the income tax beginning April 1. While the introduction of crypto taxes from April 1 has been the primary source of anxiety for many, the government has also made adjustments in filing updated returns, new tax laws on EPF interest, and tax exemption on Covid-19 therapy.
ACCOUNT FOR EPF
One of the numerous significant results in the non-crypto sector is imposing a limit on tax-free contributions to the Employee Provident Fund (EPF) account of Rs 2.5 lakh.
IMPROVEMENTS IN ITR
Another significant adjustment has been made to the income tax return. Taxpayers will now be able to file an amended return for errors or inaccuracies in income tax recoveries within two years of the end of the appropriate assessment year.
Previously, there was only a 5-month window from the due date of filing returns to alter tax returns. However, it will be unable to file an amended return to indicate any new loss or drop in tax due.
This provision was expressly designed to give a chance to people who overlooked or underreported income or had any other error that resulted in less tax filing in the initial tax return. MULTICOLOR FUNDS
Dividends received from mutual funds, or domestic corporations will now be taxed. Investors in higher tax rates will have a more significant tax burden, while those in lower tax levels will face a lesser tax burden.
TREATMENT FOR COVID
The amendment also provides provisions for state government employees, Covid impacted families, and people with disabilities.
Exceptional tax exemption possibilities will also be provided to Covid afflicted households. There would be no tax on money received by family members of the deceased up to Rs 10 lakh if received within 12 months of the death. Finally, if the guardians of such persons purchase an insurance policy on their behalf, they may be eligible for tax relief under specific conditions.
EMPLOYEES IN THE GOVERNMENT SERVICE
State government workers can additionally claim a deduction under Section 80CCD(2) for the employer’s NPS contribution of up to 14% of their base pay and dearness allowance.
TAX ON CRYPTO EXCHANGES
Finally, the taxation of digital assets, including crypto money, has sparked the most outrage among investors. During the Union Budget Session 2022, Finance Minister Nirmala Sitharaman revealed that a flat 30% tax would be paid on any gain gained from digital assets such as cryptocurrency. While investors will be charged in this manner, recipients of digital assets will also be taxed. Under specific scenarios, the recipient who received digital assets as a gift may be required to pay 1% TDS and gift tax.
The authored article is written by Sejal Wakkar and shared with Prittle Prattle News exclusively.
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