Personal Taxes

No adjustments in earnings tax, seniors, NRIs get relief

However, some tax experts believe that this year’s budget may not see many new changes since a new income tax system was introduced in the 2020-21 budget year. “The fact that a new tax system was introduced last year means there aren’t many changes to come now,” HDFC Securities said in a note. A note from Religare Broking said: “Given that the government is already in high deficit due to lower tax levies, we think large cuts are unlikely. However, some relief for certain distressed sectors and income tax tinkering could come . ” the cards.”

A report by Mint quoted tax experts as saying that the government may pin some irregularities in the NPS or national pension system related to income tax benefits. “Up to 14% of the employer’s contribution for central government employees is permitted for contributions to the Tier I account, but a maximum of 10% of the employer’s contribution in accordance with Section 80CCD (2) can be deducted for other employees.” Tax expert Balwant Jain was quoted as saying.

Under applicable income tax laws, the move of investments in Shares within the same scheme of a mutual fund from a growth option to a dividend option (or vice versa) and from a regular plan to a direct plan or (or vice versa) is considered a “transfer” and is therefore subject to capital gains tax although the amount invested remains in the mutual fund system. Moving investments to / from investment plans to another within the same Unit Linked Insurance Plan (ULIP) by insurance companies is not considered a “transfer” and is therefore not subject to capital gains tax.

The mutual fund industry, in its 2021 budget proposals, stated that “a uniform tax treatment for” switch “transactions related to ULIPs and mutual fund products is necessary to level the playing field,” the report said.

In order to relieve paid taxpayers of the middle class amid the coronavirus pandemic and stimulate consumption, the central government could increase the standard deduction limit in the 2021 budget, experts were quoted as saying. The standard deduction is a fixed deduction that certain income tax recipients are allowed to take regardless of costs incurred or investments made. The standard allowance introduced in the 2018-19 budget replaced the sickness and transport allowance. It was further increased to Rs 50,000 in the following budget.

The standard deduction should be increased from 50,000 to 1,00,000 Rs, according to a notice from Axis Securities.

Ritu Shaktawat of Khaitan & Co wrote for the Economic Times, suggesting weighted tax breaks for research and development. She wrote that in the current fiscal year, many Indian companies have invested significant research and development costs to develop a cure for the novel coronavirus. The pandemic has opened our eyes to the importance of such research and development activities and how such companies form the backbone of the country in these troubled times. Therefore, the government should consider weighted deductions for scientific research and development expenses, especially research and development expenses related to the development of vaccines / medicines for diseases.

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