New Delhi: Union Finance Minister Nirmala Sithraman tabled Budget 2021 in Parliament on Monday, February 1. In this year’s budget, the government has emphasized more on healthcare, infrastructure and other sectors, while providing no particular relief to the middle class in terms of income tax exemption. However, senior citizens above 75 years of age are now exempted from filing tax returns. Besides, some changes in tax rules were announced in a bid to help the salaried class. 

Take a look at the top 5 income tax changes that every taxpayer should know: 

1. EPF contribution: Interest on employee contributions to the provident fund (PF) above Rs 2.5 lakh per annum would be taxed from April 1, 2021. “In order to rationalize tax exemption for the income earned by high-income employees, it is proposed to restrict tax exemption for the interest income earned on the employees’ contribution to various provident funds to the annual contribution of Rs 2.5 lakh,” Sitharaman said in her Budget 2021-22 speech.

2. Pre-filled ITR Forms: In a bid to ease the filing of returns, pre-filled Income Tax Returns (ITR) will be been given to individual taxpayers.
 
3. LTC Scheme notified: In Budget 2021, the Modi government has notified the Leave Travel Concession (LTC) cash Voucher scheme. Centre had announced the scheme last year for individuals who were not able to claim their LTC tax benefit due to COVID-19 induced restrictions on travelling.

4. No  ITR Filing For Senior Citizens:  Senior citizens of 75 years and above having pension income and interest from fixed deposit in the same bank would not be required to file income tax returns for the financial year beginning April 1.

5. TDS at Higher rate: Budget 2021 introduced a new provision —  Section 206AB in Income Tax Act, providing for higher rate for tax deducted at source (TDS) for the non-filers of income tax return. Under the proposed TDS, rate in this section is higher of the followings rates: Twice the rate specified in the relevant provision of the Act; or twice the rate or rates in force; or the rate of 5%.

4. No  ITR Filing For Senior Citizens:  Senior citizens of 75 years and above having pension income and interest from fixed deposit in the same bank would not be required to file income tax returns for the financial year beginning April 1.

5. TDS at Higher rate: Budget 2021 introduced a new provision —  Section 206AB in Income Tax Act, providing for higher rate for tax deducted at source (TDS) for the non-filers of income tax return. Under the proposed TDS, rate in this section is higher of the followings rates: Twice the rate specified in the relevant provision of the Act; or twice the rate or rates in force; or the rate of 5%.