"Income Tax Policy Changes" - Announced by CBDT:
1. Income Tax New disclosures asked in the new ITR forms 1to7 are: 1. House ownership: Individual taxpayers who are joint owners of house property cannot file ITR 1 or ITR4.
2. Passport: One needs to disclose the Passport number if held by the taxpayer. This is to be furnished both in ITR 1-Sahaj and ITR 4-Sugam. Hopefully, it will be made mandatory in other ITR Forms as and when they are notified.
3. Cash deposit: For those filing ITR 4-Sugam, it has been made compulsory
to declare the amount deposited as cash in a bank account, if such amount
exceeds Rs 1 crore during the FY.
4. Foreign travel: If you have spent more than Rs 2 lakh on travelling
abroad during the FY, you need to disclose the actual amount spent.
5. Electricity consumption: If your electricity bills have been more than
Rs 1 lakh in aggregate during the FY, you need to disclose the actual
amount.
6. Investment details: Details of investment qualifying for deduction
under chapter VIA with bifurcation of details of investment made during the
period from April 1, 2020 to June 30, 2020.
7. For every assessment year, the last date for filing tax returns is July
31, However, this year ITR filing date has been extended till November 30,
2020 due to pandemic Covid-19.
8. Income Tax Exemptions and Deductions that you can claim under the New
Tax Regime for FY 2020-21 (AY 2021-22): Withdrawal by an employee from the
Employees' Provident Fund (EPF) is not taxable after 5 years of continuous
service.
9. Withdrawal from National Pension Scheme (NPS) on maturity or premature
closure up to 40% of the amount received on such withdrawal remains tax
free for all. In case of partial withdrawal from NPS, up to 25% of the
contributions made by the individual will be tax free. Employer's
contribution to NPS up to 10% of their basic salary and dearness allowance
also remains tax free.
10. Under Section 10 (10D) of the Income Tax Act, the sum assured and any
bonus paid on maturity or surrender of the life insurance plan is tax free.
Maturity proceeds continue to be exempt under Section 10(10D) even in the
new regime. The maturity amount including interest received on the Sukanya
Samriddhi Yojana will not attract any tax.
11. Conveyance Allowance granted to meet expenditure incurred on
conveyance in performance of duties of an office and any allowance granted
to an employee to meet the cost of travel on tour or on transfer (including
relocation) are tax free.
Interest received from post office savings account balance up to ₹3,500
annually per individual will remain free from tax.
12. Any scholarship granted to meet education costs is tax exempt under
Section 10 (16) of the Income Tax Act. Gratuity received from the employer
up to ₹20 lakh after rendering 5 years of continuous service. Leave
encashment received at the time of resignation or retirement up to ₹3 lakh.
13. Form 26AS will now be a complete profile of the taxpayer w.e.f.
01.06.2020, CBDT vide Notification dated May 28, 2020 amended Form 26AS in
Sec 285BB w.e.f. 01.06.2020. Key takeaways are:
14. New form 26AS will also provide information in respect of "Specified
financial transactions" which include transactions of purchase/ sale of
goods, property, services, works contract, investment, expenditure, taking
or accepting any loan or deposits of such value as may be prescribed but
not less than of Rs 50,000.
15. Information about income tax demand, refund, proceedings pending, and
proceedings completed which may include assessment, reassessment under
section 148,153A 153C, revision, appeal will also be shared in this form
26AS.
16. Information on this form 26AS will not be a one-time affair at year
end. This will be a live 26AS, as this will be updated regularly within 3
months from the end of the month in which such information is received.
17. Form 26AS will now be a complete profile of the taxpayer for that
particular year as against earlier form 26AS which just provided the
information about taxes paid by way of TDS/TCS or self-assessing. This form
will also have mobile no, email I'd and Aadhar no. of the taxpayer.
18. Further an enabling provision has been notified empowering the CBDT to
authorise DG Systems or any other officer to upload in this form,
information received from any other officer, authority under any law. Thus
any adverse action initiated or taken or found or order passed under any
other law such as custom , GST , Benami Law etc. including information
about Turnover , import , export etc. will also be put in this form 26AS so
that not only the concerned taxpayer but also all the Income Tax
authorities will know and have access to such information.
19. This form 26AS will also provide information received by Tax Deptt
from any other country under the treaty /exchange of information about
income or assets of the taxpayer located outside India.
20. The implication of this new form 26AS will be that banks , financial
institutions or any other authority or customer , buyer etc. while carrying
out due diligence of the person/ corporate concerned will now ask for form
26AS so as to be sure that there are not any major issues about such
person/corporates.
21. This will now make difficult for any taxpayer to hide information from
any bank / financial institution/ authority about any proceedings against
under any law or tax demand, tax disputes etc, So mandatorily passport no.
is to be mentioned, applicable for all.
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