Double-Edged Sword Regime of Tax: In the history of human race, there is only one issue that is continuous, and that is alter. Similarly, this is the initially time considering the fact that the attainment of Independence by India that there is an optional tax regime. This year’s tax regime is synonymous to a double-edged sword exactly where you have a option and you can narrow your selections.
New Tax Regime
The price range for 2020-21 has introduced a new tax regime, wherein an person taxpayer can opt for reduced tax prices coupled with really handful of deductions accessible and fewer exempt allowances accessible.
Old or Regular Tax Regime
Whereas in a typical tax regime, a taxpayer has to spend tax at greater prices nonetheless, he has the ideal to claim different exemptions and deductions.
What are the implications of selections based Tax Regime for Salaried class and Business fraternity?
Effect on Salaried Class
A salaried particular person has specific privileges in the sense that The salaried particular person has the ideal to pick amongst the old tax regime or the new tax regime each and every year. For instance, Aakash who is working at Sag Infotech can opt for a New Tax regime in the FY2020-2021 and in the next Financial year 2021-22 he can
Either Opt for Old tax regime or
Continue with a New tax regime
Effect on Business Class
No Choice just after the initially option of New Tax Regime.
A particular person with Business Class has limitation in a double-edged regime of tax and he has to evaluate the impact of tax regime on a lengthy term basis and then choose a unique tax regime as as soon as he selects a unique tax regime, in the next year, he can not shift to other tax regimes. If Vikas is a businessman and he shifts to a New Tax regime in the FY 2020-2021
In the FY 2021-22 he can not shift to the Old Tax Regime
OR
If Vikas chooses to continue with the Old Tax regime in FY 2020-2021
In the FY 2021-22, he can continue with the Old Tax regime
In the FY 2021-22, he can switch to the New Tax Regime. But in the following years i.e. FY 2022-23, he can not switch back to the Old Tax regime and has to continue with the New Tax regime.
Shrinked the Period for Filing the Belated ITR or For Revising Filed ITR
Earlier
If you failed to file your ITR by the due date (that was July 31st ), then also you could file ITR by March 31st along with the late charge. A equivalent rule was applicable in case of omission or error.
Now
The Finance Bill 2021-2022 has proposed to decrease the time limit by 3 months i.e. till December 31st of the very same economic year. Consequently, do not procrastinate the filing of Income Tax Returns.
Inclusion of Dividend Income in ITR for the year ended March 31 2021
Earlier
Till March 31, 2020, the dividend that was received from
Indian Companies as nicely as
Mutual funds schemes
was tax-absolutely free from your hands. The explanation being the Tax levied was paid by the Mutual Fund or the Company
Now
The Dividend is taxable in your hands. Kindly refer to Form Number 26 AS for tax prices.
(By Amit Gupta, MD, SAG Infotech)