Filing Tax for 2020-2021- Here is what you need to know
For the global pandemic going around, filing of tax is going to be new. With the new regulations and post pandemic situation, there are terms to take care of. These will help for the scope of the filing for the tax 2020-2021, those who are filling in for the current year.
About the new year for 2020-2021
The new financial year has kicked off and it has started. For all those who are filling in for their tax returns and updates have to make sure of several things. First of all, there are changes which are being applied to the same. The government have said that the changes are readily happening for the pandemic situation and that millions of people are losing their jobs.
New rules which will be effective from April:
- As announced for the budget 2020, there are new tax slabs that will come into effect from April. These slabs are made solely for the people who are not able to file in for the tax returns due to the extended lockdown. The old tax slabs are going to remain in effect as well. It is mainly for the people who are likely to go with the regime for.
- Zero tax for those who are having an income of about 2.5 lakhs.
- 5% tax for those who have an income of 2.5lakhs to 5lakhs.
- 10% tax for those who have an income of 5lakhs-7.5 lakhs.
- 15% tax for those who have an income of 7.5lakhs- 10lakh.
- 20% tax for those who have an income of 10 lakh-12.5 lakh.
- 25% tax for those who have an income of 12.5lakh-15lakh.
- 30% tax for those who have an income of more than 15 lakh.
- The employer contribution has been divided and those which are exceeding more than 1.5 lakhs in a year under the recognised provident funds like the EPF or the other funds which are coming under the exempted establishments are all taxable. If there is an individual opt for the claim and the new tax regime, there is the source for income tax deduction on employer. It is done mainly towards the NPS account of the employer on which the deduction is counted. The practical part of the deduction is made on the original amount of the tax deducted.
- For those who are buying shares and bonds and even houses, the tax exemption is made for the date of around March 31, 2021. For the amount on which the houses are bought, it can be around 45 lakh. Those who have taken loan to purchase all the houses up to rs 45 lakh will have an additional claim on the tax reduction. The reduction is based of 1.5 lakh and on the existing deduction of about 2 lakh.
- The dividend which are received from all the mutual funds and all the domestic companies will face another reduction as well. These bonds and funds will be taxable and will be kept at hand. Till the last financial year, the dividend was tax free and in the hands of the recipient. However, the mutual funds, deducted on the basis of the dividend distribution tax at a rate of 11.2 percent will be equity oriented. It will be charged for about 29.12 percent for all the debt oriented funds.
- For the employees of the start-ups, the new tax regime is something new. It is going to have an effect from today which can allow for the deferment of tax payment as a whole. It is based onto the tax payment of the shares which are allotted to the shareholders. It is for them under the Employee Stock Ownership Plan. The new regime will have the tax payment of about 48 months on excise duty and the sale of shares, whichever is earliest and convenient.
What are the new changes which are going to happen for the current year?
- Financial year is not extended
The financial year is not extended for the current changes on the tax filing and returns. The financial year is going to stay the same for those who are filing. It is clarified by the government that the time will be March 31, 2020. The Indian stamp act said that the year extension will be done on the basis of the July 1st, 2020 but it won’t be the same.
- The last date for the IT savings is extended
The last date for the IT savings has been extended by the government. If you were not able to file in for the IT savings amidst the lockdown then there is some good news for you. The government have declared that those individual filing in for the IT saving will have a special offer which is that they can get their file in by June 30th.
- The new tax regime is in force
The new tax regime which is starting from 2020-2021 will be in force. As said and discussed at the first stage of this article, income groups are divided. This is how the new tax is going to be in shape. The tax regime is going to focus more on the higher income groups. For those who have lost their jobs, the tax will be completely nil. For those who have their old business loss and other consolidated damages, there are regime going in for the same. These are the new scopes in action.
These are the new exemptions and other methods to be applied for the new tax returns and filings. For the first time, those who are filing in, there will be relatable exemptions. For the others, the tax benefit available are made onto the following grounds. These are the basics which are going to happen and take place for the coming years. The pandemic have shaken the financial industry and sector and the very reason why the government is trying for the tax payers to have an ease in the lockdown.