Major Changes in the Mechanism of Income Tax wef 1 April 2021

The following are notable changes to the income-tax regime that will take effect on April 1, 2021:

No requirement of tax filing for senior citizens above 75, Pre-filled IT forms, Tax on interest on PF, Income tax return (ITR) non-filers, Penalty imposition for non-linking of Aadhar & PAN, and High TDS/TCS Rate for submission of bills under LTC Cash Voucher Scheme.

A. Senior-Citizens Above 75 Years Exempted from Tax Filing
    1. Senior citizen shall be exempted from filing income tax
    2. If he is above the age of 75 years
    3. Who has a pension scheme
    4. Who earns interest on fixed deposit in the same bank

B. Pre-filled ITFT Forms
This time in the Financial Year 2021-22, Pre-filled IT Forms shall be put in place.
Items shall be included in pre-filled IT forms
The details related to Capital Gains from Listed Securities, Interest from Banks/Post Office, Dividend Income and so on shall be included in the Prefilled ITft Forms. Gone are the days when salaried employees only used to fill Pre-filed ITft form. Others used to fill Form-16. Now the domain of Prefilled ITft Forms has been widened.

C. No Tax for Interest Earned on PF
Now the Interest that is earned on the Provident fund shall not be taxed.
However, interest on employee contribution to provident fund over 2.5 lakhs shall be taxable.

D. Raising TDS for Non Filers
In case an individual does not file Income Tax Return (ITR) w.e.f. 01.07.2021, high TDS/TCS shall be imposed
As per section 206AB that has been inserted this year, rate proposed for non-filers shall be higher of the following:
• 5%
• Two times the rate specified in the relevant provision of the Act
• Two times the rate or rates in force

Imposition of Penalty for not Linking on Aadhar & PAN
It is hereby informed that the last date for linking Aadhar and Income Tax PAN is 31st March 2021. The penalty for non-compliance shall make PAN Card in-operative. Adding further, in case of non-linking, you would be charged a fine of Rs 10,000 under Section 272B of the Income Tax Act.

Bills Submitted under LTC Cash Voucher Scheme
As per the recent Cash Voucher Scheme, for availing the benefits as per the aforesaid scheme, an employee should spend thrice the amount that is deemed as LTA fare on goods and services having GST of 12% or more. However, For availing tax benefit under the umbrella of Leave Travel Concession, bills in the correct format and vendor number should be submitted.