Budget 2021 will be remembered for many years to come, as the market went into full gear and ended with a gain of almost 5% in a single day. Wow!
What appealed to the market was the fact that there was no negative news, like Covid19 tax, Wealth Tax, LTCG changes and many other news, which was floating around before the budget. And the biggest contributor was the Government spending on account of Covid19, leading to big borrowing and fiscal deficit hitting 9.5% (Good, as well as Bad).
Coming to the point, what is there for ME? Good or Bad 😉
Tax Filing – Tax filing will become simpler for us further, as other than salary, bank, tax/ TDS details, which is available/ pre-filled, we will now have prefilled details on capital gain from listed securities, mutual funds, dividend income etc. Very good for us.
Dividend Income – Taxpayers are not required to estimate their dividend income for advance tax payment. Tax to be paid only when dividend is declared or paid by the company. Good for HNI.
Senior Citizen Tax File – Senior citizens, aged 75 or upward, need not file Tax returns, if income consists of Pension & Bank Interest (same bank linked to Pension). Good for senior citizens. Very Good.
NRI investments – Rules will be decided on the income earned from overseas retirement funds, opened by an NRI while working outside India, to avoid double taxation and other issues. Good for NRI.
EPF contribution – Interest on employees’ share of contribution to EPF, will be taxable at the stage of withdrawal, if it exceeds 2.5lacs in any year, on or after April 1st, 2021. This will be negative for affluent/ HNI’s, who contribute higher to their salary.
ULIP – Proceeds from ULIP issued on/ after 1st Feb 2021, will be taxed for capital gain, if the amount of premium exceeds 2.5lacs in any year. Again, negative for affluents/ HNI’s.
There are more to above/ Budget points, therefore we suggest you speak to your Advisor on the fine prints, its applicability & understanding.
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