No new tax benefits, relief comes in other forms | Economic Times

While stopping short of making any major changes in personal taxes, the finance minister introduced a host of smaller measures in the budget that will make tax compliance easier.Senior citizens aged above 75 who earn only pension and interest income will be exempted from filing income tax returns. They can avail of this benefit if the full tax has been paid. But taxpayers who have capital gains are not eligible for this exemption from filing tax returns.“If you are above 75 years and don’t have capital gains in one year, you can avoid filing tax returns for that year. You have to file tax returns only in the year when you have capital gains,” said Uday Ved, a chartered accountant.Since pension is treated as salary, tax will be deducted at source. However, annuities received from insurance companies are treated as pension and don’t qualify for TDS. Senior citizens with annuities need not file returns provided they pay tax on this additional income.In the case of tax disputes, the time limit for reopening of income tax assessments is being reduced to three years from six from the end of the relevant assessment year. However, this is not a big boon for honest taxpayers because technology has improved and most assessments are smooth.According to Ved, this measure has been taken to address the concerns of investors and to make India more business friendly.To simplify the filing of returns, income tax forms will come pre-filled with details such as capital gains from listed securities, dividend income and interest from banks and post office accounts. As of now, the income tax department helps pre-fills returns with salary details. While the inclusion of interest and dividend are practical, experts said incorporating capital gains is not possible. “At the most, they can pre-fill the sales consideration and ask investors to put in the cost of acquisition,” Ved said. In addition, advance tax liability in respect of dividend income will now be payable only after declaration or payment of dividend. Following the increase in deposit insurance cover to `5 lakh from `1 lakh last year, the government proposes to allow depositors time-bound access to this amount if the bank is temporarily unable to fulfil its obligations. Earlier, the deposit cover was activated only when the bank was undergoing liquidation.The budget provides for tax exemption to be extended to the amount given to an employee in lieu of leave travel concession, subject to incurring specified expenditure. In other changes, the government proposed to extend the period for deduction of interest of Rs 1.5 lakh paid on loans taken for affordable houses by one more year to March 31, 2022.There is no change in the definition of affordable housing. The criteria remain houses with an area of 60 square meters in metros and 90 square meters in other cities costing less than Rs 45 lakh.“Affordable housing accounts for more than 35% of the supply across the top 7 cities and the extension of the tax holiday for affordable housing projects for one more year will help bring in more new supply in this segment,” said Anuj Puri, chairman of Anarock Property Consultants.Budget at a glanceHere are key highlights for the taxpayer from Union Budget 2021. Although the income tax slabs and rates were untouched, the following announcements by the FM have simplified matters to an extent. 1. More secure: Deposit cover enhancedDeposit insurance cover hiked from Rs 1 lakh to Rs 5 lakh. Depositors will get access to this amount if the bank is unable to fulfil obligations.2. Home-a-loan: boost for homebuyersEligibility period to claim additional deduction on interest of Rs 1.5 lakh paid for affordable housing loan extended to March 31, 2022.3. Point of no return: Help for senior citizensSenior citizens aged 75 or above earning only pension and interest income will no longer have to file income tax returns.4. Reduced to half: Scrutiny time limit cutTime limit for reopening of income tax assessment cut to 3 years.5. Advance tax: Only after dividend paid Advance tax liability in respect of dividend income will be payable only after declaration or payment of dividend.