The completion of the current financial year 2019-20 is 31 March and the beginning of the new financial year 2020-21 is April 1, 2020. With the start of the new financial year, many new rules are also coming into effect. Apart from this, the government has extended the deadline of some rules or procedures due to the 21-day lockdown going on across the country to prevent the spread of the coronavirus so that they will remain intact even after the start of the new fiscal year. It also includes the filing of income tax returns for the year 2018-19. The government has extended its last date. Similarly, the last date for linking pan cards to Aadhaar has also been extended to June 30. Today we are going to tell you about some of the income tax-related rules announced in the budget 2020, which are going into effect from April 1.
1. According to the announcement made in the Budget 2020, the new tax slab will be effective from April 1. However, the old tax slab will also remain in effect. This will give people the option to choose one of the two. The new tax slab announced in the budget has zero tax on annual income up to 2.5 lakh, 5 percent on annual income between 2.5 lakh and 5 lakh, and 10 percent on an annual income of above 5 lakh and less than 7.5 lakh, and 15 percent on an annual income above 7.5 lakh and below 10 lakh, 20 percent on annual income above 10 lakh and below 12.5 lakh, 25 percent on annual income above 12.5 lakh and below 15 lakh and 30 percent on annual income above 15 lakh. There is a provision of tax.
2. Dividends received from mutual funds and domestic companies will be taxable to the recipient. The new tax rule, effective from April 1, will put more burden on investors in higher tax brackets, while those in lower tax brackets will be less burdened.
3. If the employer’s contribution to the NPS, EPF and pension fund crosses Rs 7.5 lakh in a year, it will be taxable at the employee’s end. This change in the income tax rule will apply to both new and old tax slabs.
4. For those who are buying a house for the first time and its price is up to 45 lakh rupees, then for them, the government has extended the date of additional tax benefit for one year till 31 March 2021. The landlord who takes a loan to buy a house up to 45 lakhs, will get an opportunity to claim an additional tax exemption of 1.5 lakhs on interest in addition to the existing two lakhs tax rebate.
5. In the tax rules applicable from April 1, the government is giving relief to the employees of Startups, they are exempted from payment of tax on the shares allotted within the ESOPs or Employee Stock Honors Plan.