Significant Changes in Indian

Some major changes in Tax Regimes which are going to affect Income Tax & GST w.e.f. 1^st April 2021 are as follows:

New Income Tax Slab Rate
Pre-Filled ITR Forms
Tax on PF Interest
Penalty for Not-Linking of Aadhar Card & PAN Card
High TDS/TCS for ITR Non-Filers
Bills under LTC Cash Voucher Scheme
No Tax-Filing for Senior Citizens above 75 years
Mandatory Requirement of HSN/SAC Code on Invoices
Mandatory E-Invoicing for B2B Transactions

New Income Tax Slab Rate

A new tax regime for Income tax payers was announced in Union Budget 2021 which will be in effect from 1^st April 2021. It was introduced mainly to simplify taxes in India as it reduces Tax rates of various Income Slabs as well as it has removed rebates & exemptions.

However, in old tax regime, taxpayer gets various rebates & exemptions, which is still available for taxpayer. It means that the taxpayer is having option to choose between new regime (where the rates are lower but there is no exemptions or deduction) & old regime (where exemptions & rebates can be claimed as per the Income slab rates were levied earlier).

Let’s discuss in detail about Old Tax Regime & New Tax Regime and its comparison.

Old Tax Regime	Rates	New Tax Regime	Rates
Income from ₹ 2.5 lakh to ₹ 5 lakh	5%	Income from ₹ 2.5 lakh to ₹ 5 lakh	5%
Income from ₹ 5 lakh to ₹ 10 lakh	20%	Income from ₹ 5 lakh to ₹ 7.5 lakh	10%
Income above ₹ 10 lakh	30%	Income from ₹ 7.5 lakh to ₹ 10 lakh	15%
		Income from ₹ 10 lakh to ₹ 12.5 lakh	20%
		Income from ₹ 12.5 lakh to ₹ 15 lakh	25%
		Income above ₹ 15 lakh	30%

Click here to read more in detail

Pre-Filled ITR Forms

A major change in Income Tax Returns Form i.e., Pre-filled ITR is introduced w.e.f. 1^st April 2021. In order to ease compliance for the taxpayer, the details of Salary Income, Tax Payments, TDS, capital Gains from listed securities, interests, etc. will already come pre-filled in ITR. Earlier Pre-filled ITR Form was available only for salaried employees but now the scope has become wide.

Tax on PF Interest:

Interest earned from the provident fund is exempted from Income Tax. But the Union Budget 2021 has proposed that the Interest on Employee Contributions towards the provident fund above Rs. 2.5 lakh shall be taxable.

The purpose is to tax high-value depositors in the Employees Provident Fund (EPF)

Penalty for Not Linking of Aadhar Card & PAN Card:

The Due-date for linking Aadhar & PAN was 31^st March 2021. Further, the Central Government has extended the last date for linking of Aadhar & PAN from 31^st March 2021 to 30^th June 2021, because of the difficulties arising out of the Covid-19 pandemic. PAN Card will become in-operative in case of Non-Linking.

Penalty shall be charged in case of non-linking of Aadhar & PAN for Rs. 10,000, as per Section 272B of the Income Tax Act.

High TDS/TCS for ITR Non-Filers:

If any individual does not file ITR w.e.f. 1^st July 2021, high TDS/TCS shall be imposed.

A new Section 206AB has been inserted, which provides higher rate for TDS for the non-filers of ITR, which shall be higher of the following-

5%
Twice the rate specified as per relevant provision of the Act.
Twice the rate or rates in force.

Similarly, a new Section 206CCA, has been inserted, which provides a higher rate for TCS for the non-filers of ITR, which shall be higher of the following-

5%
Twice the rate specified as per relevant provision of the Act.
Twice the rate or rates in force.

Bills under LTC Cash Voucher Scheme:

To avail the benefits of tax under the LTC Cash Voucher Scheme, submit the required bills in the correct format, containing GST amount & GST Number of the vendor to the employer (provided that the employer offers the scheme) on or before 31^st March 2021. As per the scheme, an employee is required to spend 3 times the amount deemed as LTA fare on Goods & Services which attracts GST of 12% or more

No Filing of Tax for Senior Citizens above 75 years:

Government has proposed to reduce compliance burden on the taxpayer who are above the age of 75 years & is having pension income & interests from Fixed Deposits, they need not need to file ITR. Bank will deduct the Income Tax which the taxpayer has to pay & deposit to the government.

Mandatory Requirement of HSN/SAC Code ON Invoices

GST taxpayer having turnover of more than Rs. 5 Crore in the preceding financial year has made mandatory to furnish 6 Digits HSN / SAC Code w.e.f. 1st April 2021. Click here to read more in detail.

Mandatory E-Invoicing for B2B Transactions

CBIC has notified that the GST E-Invoicing is made mandatory for businesses having turnover of more than Rs. 50 Crore in the preceding financial year for B2B Invoices w.e.f. 1st April 2021. Click here to read more in detail.