Seniors over 75 years of age who only have pension and interest income are exempt from filing their tax returns.
The government of the Union has not made any changes to the existing income tax system. Finance Minister Nirmala Sitharaman said at the budget meeting that the number of income tax returns had increased from Cr 3.31 in 2014 to Cr 6.48 in 2020.
“To facilitate compliance for taxpayers, details of salary income, tax payments, TDS, etc., are pre-filled in income tax returns. To facilitate filing of returns, details of capital gains on listed securities, dividend income, and interest from banks, post offices, etc., is also pre-filled, “said the finance minister.
It announced the exemption from filing income tax returns for seniors over 75 years of age who only have a pension and interest. “Now, in our country’s 75th year of independence, if we continue our efforts with renewed vigor, we will reduce the compliance burden on our seniors aged 75 and over. For seniors who only have pension and interest income, I suggest an exemption from filing their income tax return. The paying bank will deduct the necessary tax on their income, ”the FM said.
The finance minister also announced that the deadline for reopening tax assessments would be reduced from the current six years to three years. Nirmala Sitharaman said, “Currently an evaluation can be reopened for up to 6 years and in severe cases of tax fraud up to 10 years. As a result, taxpayers have to remain under uncertainty for a long time. I therefore propose reducing the period for reopening the evaluation from the current 6 years to 3 years. ”
She added, “Even in serious tax evasion cases, the valuation can only reopen for up to 10 years if there is evidence of income obscuring 50 lakh or more per year. Even this reopening can only take place with the approval of the Chief Inspector, the highest level of the income tax department. ”
The government also proposed to make the Income Tax Appeal Courts faceless and create a national Income Tax Appeals Court. “We are going to set up a national court of appeal for faceless income tax. All communication between the tribunal and the appellant must be electronic. If a face-to-face hearing is required, it will be done through video conferencing,” Nirmala said on the third of her.
The budget comes at a time when India is grappling with the COVID-19 pandemic and the economy is suffering from the aftermath of the lockdown.
Last year, the government introduced reduced tax breaks with the clause that those who choose to do so cannot claim any deductions. According to the tax system, those earning up to Rs 5 lakh did not have to pay any income tax. Those earning between Rs 5 lakh and Rs 7.5 lakh were 10%, between Rs 7.5 and Rs 10 lakh per year with 15%, between Rs 10 lakh and Rs 12.5 lakh with 20%, between Rs 12.5 lakh and Rs 15 lakh taxed at 25% and above at 30%.
However, if individuals wanted to claim deductions, they could still do so under the old regime. The old regime dictated that there would be no taxes up to Rs 2.5 lakh, 5% between Rs 2.5 lakh and Rs 5 lakh, 20% between Rs 5 lakh and Rs 10 lakh, and 30% for those over Earn Rs 10 lakh. The proposal identified which system would benefit people based on their income and the investments they made.