Finance Minister Nirmala Sitharaman, on Monday, said that the senior citizens, above 75 years of age, with only one pension and interest income would be exempted from filing income tax returns (ITR).
Banks paying up interest will deduct the tax on their behalf. "We shall reduce the compliance burden on our senior citizens who are 75 years of age and above. For senior citizens who only have pension and interest income, I propose exemption from filing their Income Tax return," FM Sitharaman said in her budget speech.
The finance minister, however, did not announce change in income tax slabs for the salaried class.
In a major move, FM Sitharaman reduced the time limit for reopening of income tax assessment cases to three years from six years, while for serious tax fraud cases where concealment of income is Rs 50 lakh or more it would be 10 years.
She said to end the uncertainty in the minds of taxpayers over reopening of assessment cases, the time limit for a reduction in the limit for reopening to assessment to three years from six years earlier.
"The government has proposed to review over 400 old exemptions in indirect taxes and is going to begin extensive consultation from October 2021", FM Sitharaman said.
Sitharaman said the tax department will notify rules to remove hardships of double taxation faced by non-resident Indians (NRIs).
Pre-filled income tax returns with details on capital gains from listed securities, dividend income and interest income from banks and post offices will also be available soon, she said.
For small taxpayers with taxable income of up to Rs 50 lakh, a dispute resolution committee will be set up.
The finance minister said 1.10 lakh taxpayers have availed the Direct Tax Vivad Se Vishwas scheme to resolve tax disputes.
She also stated that the number of income tax return filers increased to 6.48 crore in 2020 from 3.31 crore in 2014.
The Budget proposed to start a faceless Income Tax Appellate Tribunal (ITAT).
FM Sitharaman also announced a major relief for states and said that the government has accepted the recommendation of the 15th Finance Commission to give 41 per cent of share of taxes to states.