By Devanshi Thakkar
From April 1, the following changes that are set to happen include, LPG cylinder price, banking rules due to merger of banks, income tax rule changes in terms of EPF investment, TDS/TCS deduction, etc. This could potentially suggest that inflation is set to happen as the prices go soaring from the new financial year.
Change in the Income Tax Rates
The new Income Tax rate will be effective from April 1, 2021. As per the new rate no income tax is leviable where the total income does not exceed Rs.2,50,000; 5% tax is applicable if total income exceeds Rs. 2,50,000 but does not exceed Rs. 5,00,000; Rs.12,500 plus 20% of income tax is applicable on total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000; and Rs. 1,12,500 plus 30% of income tax is applicable on total income exceeds Rs.10,00,000.
LPG Cylinder Price
The rise in LPG prices might happen as the government announces a change in LPG cylinder prices every month. In March 2021, the LPG price in New Delhi was increased from Rs 769 per LPG cylinder to Rs 819 per LPG cylinder price.
Exemption for LTC Cash Scheme
The Finance Bill 2021 has inserted second proviso in clause 5 of section 10, so as to provide that, for the assessment year beginning on the 1st day of April, 2021, the value in lieu of any travel concession or assistance received by, or due to, an individual shall also be exempt under this clause subject to fulfilment of conditions to be prescribed. It is also proposed to clarify by way of an Explanation that where an individual claims and is allowed exemption under the second proviso in connection with prescribed expenditure, no exemption shall be allowed under this clause in respect of same prescribed expenditure to any other individual.
If a customer has a bank account in these seven public sector banks — Dena Bank, Vijaya Bank, Corporation Bank, Andhra Bank, Oriental Bank of Commerce, United Bank of India and Allahabad Bank — then their passbook and cheque book will become useless as these banks have merged with other banks.
Taxability of Interest on PF on employee’s contribution
The Finance Bill 2021 inserted proviso to clause(11) and clause (12) of section 10 of the Act, providing that the provisions of these clauses shall not apply to the interest income accrued during the previous year in the account of the person to the extent it relates to the amount or the aggregate of amounts of contribution made by the person exceeding Rs.2,50,000 in a previous year in that fund, on or after 1st April, 202, computed in such manner as may be prescribed.
The income tax rule for TDS (Tax Deducted at Source) will also be changed from April 1, 2021, and if a person doesn’t file an income tax return (ITR), then the TDS rate on bank deposits would double.
Depreciation of Goodwill
Section 55 explains the cost of acquisition of capital asset has been amended to Provided that where the capital asset, being goodwill of a business or profession, in respect of which a deduction on account of depreciation under sub-section (1) of section 32 has been obtained by the assessee in any previous year preceding the previous year relevant to the assessment year commencing on or after the 1st day of April 2021, the provisions of sub-clauses (i) and (ii) shall apply with the modification that the total amount of depreciation obtained by the assessee under sub-section (1) of section 32 before the assessment year commencing on the 1st April 2021 shall be reduced from the amount of purchase price;”
Leave Travel concession
Also, there will be a Leave Travel concession or LTC cash voucher scheme’s exemption as against a leave travel concession (LTC). This scheme allows an employee to claim an exemption under LTC allowance against the purchase of specified goods or services.
Time limit for completion of assessment, reassessment and recomputation
In respect of an order of assessment relating to the assessment year commencing on or after the 1st April, 2021, the provisions of this subsection shall have effect, as if for the words “twenty-one months”, the words “nine months” had been substituted.