Income Tax Rules Change: April 1 marks the beginning of a new financial year, and this means that several rules in the finance front are usually changed during this period. This year is no exception too, as a set of new income tax rules have come into effect from April 1, that is today. The new norms are usually announced as part of that year’s Union Budget and in the form of CBDT and RBI notifications, and come into effect from April 1, as it is the beginning of the financial year. This year, many changes related to income tax, including crypto tax, revised TDS and TCS rates, ITR filing rules and others, have become applicable.
Here is a look at some of the changes that will be effective from April 1, 2022, which is today
1. Pay Higher TDS if You Haven’t Filed ITR for FY2020-21
The government has announced that if taxpayers do not file income tax returns for the previous year, a higher TDS and TCS will be applicable from the next financial year. This was announced in Budget 2021, and the change was finally made applicable during Budget 2022. It should also be noted that this rule will not be effective if the source of income is salary, provident fund — but will come into effect if the same is interest income, dividend income under the provisions of the Income Tax Act.
2. Cryptocurrency, Other Digital Assets to be Taxed
From April 1, that is today, a 30 per cent tax will be imposed on gains from virtual digital assets and cryptocurrencies such as Bitcoin, Ethereum, Dogecoin etc. This was one of the biggest announcements made by finance minister Nirmala Sitharaman in Budget 2022-23. On top of this, no set-off of losses though buying and selling of VDAs, and no deduction in respect to expenditure on digital assets, will be allowed. A new section 115BBH has been introduced in the Income Tax Act, 1961, to tax virtual digital assets.
3. No Additional Deduction on Buying Affordable Homes
The government, has during the Budget this year, done away with the provision for additional deduction up to Rs 1.5 lakh under Section 80EEA. The government has not extended the specific tax deduction on the home loan EMIs subject to conditions, announced in last year’s Budget.
4. Tax Benefits for Differently Abled Persons
Starting from today, the government will relax provisions under Section 80DD that offers tax breaks for differently abled people. Under this, if an individual buys a life insurance policy meant for someone with disabilities, then they can claim deductions under Section 80DD even if the policy benefits come into effect while the individual is alive.
5. No ITR Filing Required for Seniors
In Budget 2022, Nirmala Sitharaman had announced that senior citizens above the age of 75 years will not be required to file their income tax returns anymore starting from April 1. This was one of the big income tax rules changes announced in this year’s budget. However, this is subject to certain conditions.
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