This Article is From Mar 31, 2022

10 Changes Coming Into Effect From April 1 For Next Financial Year

Several new rule changes are coming into effect from April 1, when the new financial year begins.

10 Changes Coming Into Effect From April 1 For Next Financial Year

These changes will directly impact the day-to-day lives of the people.

Several new tax rule changes are coming into effect from April 1, when the new financial year begins. These include tax rules on Employee Provident Fund (EPF) interests, Tax Deducted at Source (TDS), and crypto-assets.

Here's a rundown of 10 new things to keep in mind this financial year

  1. 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.

  2. Crypto tax: All crypto gains from various virtual digital assets will now be taxed at a flat rate of 30 per cent. 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.

  3. 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).

  4. 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.

  5. State government employees can contribute to National Pension Scheme (NPS): State government employees can now contribute and claim up to 14 per cent of their basic salary and dearness allowance under the National Pension System scheme. This will now be the same as the deduction available to central government employees.

  6. 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.

  7. 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.

  8. 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.

  9. Removal of benefit for home loan deduction: Until the financial year of 2021-22, there was an additional deduction a citizen could take on home loans with interest up to Rs 1.5 lakh for properties valued less than Rs 45 lakh. The finance minister has not extended this scheme to the next financial year.

  10. New rules on TDS on sale of immovable property: This is a tax deducted at the source to purchase an immovable property (land, building, factory etc.) other than agricultural land. If you are buying immovable property, you need to deduct 1% as TDS (as a buyer) from the sale price above Rs 50 lakh and then pay the rest to the seller. Earlier, tax was deducted on the money paid by the buyer to the seller.

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