Hello Readers!
The Union Budget for the fiscal year 2021-22 that came at a time when the market was in a recovery position after the threat it has gone due to pandemic, has lived up to the expectations of common people.
Finance Minister has come up with a budget that is completely growth-oriented. And after the budget tabled in the parliament, the Sensex boosted up by 2314 points. This transparently clarified that in the coming time the Indian Economy is definitely going to boost!!
Here are some of the measures that will have an impact on retail investors and common taxpayers.
Tax Leak Capped!
In the new budget, Finance Minister has come up with measures that will help stop the tax leakage by placing a cap on the Provident Fund contribution that will earn tax-free income. People from over all over the country contribute a good amount to the Public Provident Fund, in order to gain tax-free interest. In the Union Budget 2021, the limit has been set to Rs 2.50 lakhs, which means now people who have an interest rate of more than Rs 2.50 lakh in a year from Public Provident Funds will be taxable. This will apply only to the employee’s contribution and not that of the employer.
ULIP’s In The Section To Be Taxed!
ULIP’s were preferred by investors only because of their tax-free feature, but after the union budget 2021 is announced, ULIPs with very high premiums will also move into the tax net. As per the budget 2021, the policies with an annualized premium of Rs 2.5 lakh or more will be treated as mutual funds for tax purposes. This will be applicable to all policies.
Good Tax News For Senior Citizen!
Yes, there is good news for senior citizens of India who are above 75 in age, in FM’s Budget 2021. They don’t need to file returns if they have income only from pension and interest. Well, there are certain things that must be cleared before people misunderstand this good tax news. It is important to note that this exemption is only for filing tax returns, not for paying tax. Also, if they have income from rent and capital gains, they are not eligible for the exemption from filing tax returns.
Boost To Affordable Housing!
The eligibility window for the additional deduction of Rs 1.5 lakh for home loans taken for affordable housing under Sec 80EEA has been extended as per the union budget 2021. The earlier deduction given last year is expiring on March 31 this year. Well, it is important to note that this facility is available only for first-time homebuyers with loans of up to Rs 35 lakh for houses worth up to Rs 45 lakh.
Reopening of ITR’s!
The Budget 2021 came with a change in the time frame of ITR filing, within which the tax department can re-open old ITRs. The time window has been reduced from six years to three years now. The new schedule for ITR filing will ensure the taxpayers won’t be harassed by the tax department for returns filed several years earlier.
Capital Gains Tax And Dividend Filing Eased Now!
In the budget 2021, steps have been taken to ease the filing of capital gain tax and dividend. Now in the new ITR form, people will find capital gains and dividend income options pre-filled. This will create ease in the ITR filing for those who often ignore the capital gains and interest because they find it difficult to calculate them.
Keep reading for more updates on Budget 2021!!
For any kind of query you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).