The new income tax rule now changes from the 1st of April, 2022. Here are 7 updates you should know.
1. Filing Process of an updated IT Return
There is an insertion of a new provision that allows taxpayers to conduct filing of an updated return in case of any mistakes or errors taking place in the income tax returns. As a taxpayer, you can now conduct the filing process of an updated return in a time span of within two years. This can be done from the ending of the applicable assessment year.
2. NPS (National Pension Scheme) deduction to employees of State government
If you’re an employee of the state government, you will now be eligible to claim for deduction under Section 80CCD(2) for National Pension Scheme aid by the respective employer up to 14% of your basic salary & your dearness allowance, which is in alignment with the deduction obtainable to the employees of Central government under the mentioned section
3. Taxes on Provident Fund account
The (CBDT) which is the Central Board of Direct Taxes, has taken a decision to exercise Income-tax (as per 25th Amendment) Rule 2021 from the 1st of April, 2022. It denotes that a capping of tax-free contributions up to Rs. 2.5 lakhs is being levied on the (EPF) - Employee Provident Fund account. If the contribution exceeds this, it will be followed by the taxation on the interest income.
4. Surcharge on Long Term Capital Gain (LTCG)
Currently, there is a capping of 15% surcharge levied on LTCG in case of the sale of mutual funds or listed equity. From April 1 this capping will be extended to LTCG on all assets.
5. Removal of benefit as per section 80EEA
There was an extra deduction on the interest of home loans up to Rs. 1.5 Lakhs. This was pertaining to house properties that were less than Rs. 45 Lakhs in value, for 1st time home buyers. FM hasn’t prolonged this arrangement past March 31, 2022.
Consequently, this extra deduction of Rs. 1.5 Lakhs will be unavailable to taxpayers starting April 1, 2022. Additional prevailing deductions on house loan interest up to Rs. 2 Lakhs will continue u/s 24 of I-T Act.
6. Tax relief on Covid-19 treatment expenses
Many people were given money for their Covid medical treatment. As per a Press Release in the month of June 2021, these people have been provided with tax exemption.
There were some families that received money due to the death of the breadwinner in the family due to Covid19. In such cases well, tax exemption was exercised up to a capping of 10 Lakhs. However, the only condition was that they received the payment within 1 year from the death date of the deceased. This alteration will be in effect, with hindsight from 1st of April 2020.
7. Tax relief for Differently Abled People
The guardian or parent of a person who is differently-abled can receive an insurance policy for the differently abled person.
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