Budget 2021: No Change In Income Tax Slabs; Relief For Senior Citizens

Bhubaneswar: Finance Minister Nirmala Sitharaman on Monday presented the Union Budget for the coming financial year and promised a slew of measures to revive the economy which took a beating due to the COVID-19 induced lockdown last year.

People across the nation heard in bated breath Sitharaman’s speech as they eagerly waited for announcements which could provide some relief in individual taxes, Income Tax in particular.

However, in her budget speech, the Finance Minister announced no change in the existing Income Tax slabs of individuals.

The exception though was the exemption of Senior citizens, aged more than 75 years, from filing Income Tax Returns.

It is pertinent to mention here that the Finance Minister had introduced a new tax regime last year. Under the new tax regime, there is zero tax for income up to Rs 2.5 lakh.

-5 percent for income between Rs 2.5 lakh and Rs 5 lakh
- 10 percent for income between Rs 5 lakh and Rs 7.5 lakh
- 15 percent for income between Rs 7.5 lakh and Rs 10 lakh
- 20 percent for income between Rs 10 lakh and Rs 12.5 lakh
- 25 percent for income between Rs 12.5 lakh and Rs 15 lakh
- 30 percent for income above Rs 15 lakh.

In her budget announcement on Monday, the Finance Minister listed out affordable housing as a priority area for the Union government and announced tax holidays for promoter of such schemes for one more year - till March 31, 2022.

Tax holidays for start-ups, resolution of tax disputes and Goods and Services (GST) measures were also announced by Sitharaman.

Other Key Highlights In Budget 2021:

• - Substantial changes in the Direct Tax System
• - No income tax filing for senior citizens above 75 years of age having only pension, interest income
• - Government to set-up a faceless dispute resolution mechanism for small taxpayers
• - Government proposes to reduce time allowed to re-open tax investigation to 3 years from existing 6 years
• -To promote affordable housing, the claim of additional deduction of interest of Rs 1.5 lakh proposed to be extended to March 31, 2022
• -Dividend paid to business trust is proposed to be exempted from TDS
• -Advance Tax liability of divided income to arise only after declaration/payment of dividend
• - Scope of pre-filling Income Tax returns to be expanded
• -Details of Capital gains, Dividend, Interest to be pre-filled to further ease burden of compliance of taxpayers
• -To help small and medium enterprises and to promote digital transactions, the threshold for Tax audits proposed to be increased from Rs 5 crore to Rs 10 crore ( for those having 95% digital transactions)