Financial News

New Tax Regime Vs Old Tax Regime: Some important things you need to know

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The funds for 2020-21 has launched a brand new tax regime, whereby a person taxpayer can go for decrease tax charges coupled with only a few deductions obtainable and fewer exempt allowances obtainable.

Double-Edged Sword Regime of Tax: Within the historical past of human race, there is just one factor that’s fixed, and that’s change. Equally, that is the primary time because the attainment of Independence by India that there’s an elective tax regime. This yr’s tax regime is synonymous to a double-edged sword the place you will have a alternative and you may slender your selections.

New Tax Regime
The funds for 2020-21 has launched a brand new tax regime, whereby a person taxpayer can go for decrease tax charges coupled with only a few deductions obtainable and fewer exempt allowances obtainable.

Associated Information

Outdated or Common Tax Regime
Whereas in a daily tax regime, a taxpayer has to pay tax at larger charges; nonetheless, he has the proper to say varied exemptions and deductions.

What are the implications of selections primarily based Tax Regime for Salaried class and Enterprise fraternity?

Impact on Salaried Class
A salaried particular person has particular privileges within the sense that The salaried particular person has the proper to decide on between the outdated tax regime or the brand new tax regime yearly. As an illustration, Aakash who’s working at Sag Infotech can go for a New Tax regime within the FY2020-2021 and within the subsequent Monetary yr 2021-22 he can
Both Go for Outdated tax regime or
Proceed with a New tax regime

Impact on Enterprise Class
No Alternative after the primary alternative of New Tax Regime.
An individual with Enterprise Class has limitation in a double-edged regime of tax and he has to judge the impact of tax regime on a long run foundation after which choose a selected tax regime as as soon as he selects a selected tax regime, within the subsequent yr, he can’t shift to different tax regimes. If Vikas is a businessman and he shifts to a New Tax regime within the FY 2020-2021
Within the FY 2021-22 he can’t shift to the Outdated Tax Regime

OR
If Vikas chooses to proceed with the Outdated Tax regime in FY 2020-2021
Within the FY 2021-22, he can proceed with the Outdated Tax regime
Within the FY 2021-22, he can swap to the New Tax Regime. However within the following years i.e. FY 2022-23, he can’t swap again to the Outdated Tax regime and has to proceed with the New Tax regime.

Shrinked the Interval for Submitting the Belated ITR or For Revising Filed ITR

Earlier
If you happen to didn’t file your ITR by the due date (that was July thirty first ), then additionally you could possibly file ITR by March thirty first together with the late payment. An analogous rule was relevant in case of omission or mistake.

Now
The Finance Invoice 2021-2022 has proposed to cut back the time restrict by 3 months i.e. until December thirty first of the identical monetary yr. Consequently, don’t procrastinate the submitting of Earnings Tax Returns.

Inclusion of Dividend Earnings in ITR for the yr ended March 31 2021

Earlier
Until March 31, 2020, the dividend that was obtained from
Indian Corporations in addition to
Mutual funds schemes
was tax-free out of your arms. The reason is the Tax levied was paid by the Mutual Fund or the Firm

Now
The Dividend is taxable in your arms. Kindly check with Kind Quantity 26 AS for tax charges.

(By Amit Gupta, MD, SAG Infotech)

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