As the new financial year begins, there will be a host of changes in how you spend money. From April 1 onwards, many new norms will be effective such as changes in airfare to standard insurance policies. From April, if employees’ contribution to provident fund exceeds Rs 2.5 lakh in a year, the interest earned on contribution over Rs 2.5 lakh will be taxable [Image: Shutterstock]
New tax rules on provident fund: Interest on employee contributions to provident fund of over Rs 2.5 lakh per annum would be taxed, finance minister Nirmala Sitharaman announced in Budget 2021. The Centre increased the deposit threshold limit to Rs 5 lakh per annum in provident fund for which interest would continue to be tax-exempt, if there is no employer contribution.
Inclusion of dividend income in ITR for the year ended March 31 2021: the dividend received from Indian Companies as well as mutual fund schemes were tax free in your hands as the tax was on the dividend or income distributed was paid by the Company or the mutual fund till March 31, 2020.
LPG cylinder prices to become cheaper: The price of domestic cooking gas (LPG) to be reduced by Rs 10 a cylinder from April.
Air travel to become costlier: Aviation regulator Directorate General of Civil Aviation (DGCA) has hiked air security fee (ASF) that will make your air travel costlier from April. While the rise in ASF for domestic passengers is of Rs 40, for international passengers, the rise is of Rs 114.38.
Standard personal accident insurance policy: Commencing from April 1, all general and health insurers to offer a standard personal accident insurance product. Saral Suraksha Bima will offer a minimum sum insured of Rs 2.5 lakh. The maximum sum insured will be Rs 1 crore. Sum insured offers should be in multiples of Rs 50,000, IRDAI said, adding insurers can offer on their own beyond the mentioned range under this policy. Anyone over 18 years old can buy this policy. The maximum age at entry is set at 70.
Tax benefits on Unit-Linked Insurance Products (ULIP): If the annual premiums are Rs 2.5 lakh or more then the maturity gains in Unit Linked Investment Plan (ULIPs) would be taxed, the finance minister announced in union budget 2021.
HSN code mandatory for businesses with over Rs 5 crore turnover: On the Goods & Services Tax (GST) front, the generation of e-invoice by businesses with turnover of over Rs 50 crore will be mandatory from April.
Reduced period for filing the belated ITR or for revising your filed ITR: Previously, if you failed to file your ITR by the due date of July 31 you could still file it by March 31 with late fee. Likewise, after having filed your ITR, if you noticed any omission or mistake, you could revise the same by March 31 of the same year. But, Finance Bill for 2021-2022 has proposed to reduce this time limit by three months and therefore you will have time to file your belated ITR or revise your ITR till December 31 of the same financial year.
Senior citizens above 75 years exempted from filing income tax return: Starting from April 1, Senior citizens above the age of 75 years, who only have pension and interest as a source of income will be exempted from filing the income tax returns. It must be noted that the senior citizens who are above 75 years age, are not exempted from paying tax but only from filing income tax return (ITR) if they are eligible to certain conditions. There is massive relief extended to a section of senior citizens. For those aged 75 or more, and who only have pension and interest income, filing their income tax returns will not be required. The finance minister didn’t specify whether dividend income is also included to help senior citizens qualify. Many senior citizens also invest a portion of their portfolios in equities. The budget fine print is likely to provide greater clarity. (Image: Moneycontrol)
Saral Pension policy: All life insurance companies will mandatorily offer a standard individual immediate annuity product from April, asked by the Insurance Regulatory and Development Authority of India (IRDAI). Under Saral Pension policy, minimum annuity of Rs 1,000 per month, Rs 3,000 per quarter, Rs 6,000 per half year, and Rs 1,2000 per annum will be provided. The minimum entry age to buy this plan will be 40 years and the maximum will be 80 years. This will be a single premium, non-linked non-participating immediate annuity plan.