Union Finance Minister Nirmala Sitharaman on Monday presented Union Budget 2021. However, Sitharaman did not make any changes to the income tax slabs, which means that the existing regime will continue. This year’s Budget was unique as it went ‘paperless’ for the first time and will be available on the Union Budget Mobile app for both Android and iOS users.
Relief for senior citizens in Budget
There is some good news for senior citizens above 75 years of age, as they have been exempted from filing tax returns. The exemption will be available to only those senior citizens who have no other income but depend on pension and interest income from the bank hosting the pension account. “We shall reduce the compliance burden on our senior citizens who are 75 years of age and above. For senior citizens who have pensions and interest income, I propose exemption from filing their income tax returns. The paying bank will deduct the necessary tax from their income,” she said.
In her Budget 2020 speech, Sitharaman had announced the new simplified income tax regime. Under this, those earning up to ₹2.5 lakh annually are exempted from paying income tax. For those earning ₹2,50,001 to 5 lakh annually, the rate of tax is 5% while for those at ₹5,00,001 to ₹7,50,000 it is 10%. The rate is 15% for those making ₹7,50,001 to ₹10,00,000 and 20% for those between ₹10,00,001 and ₹12,50,000. For those at ₹12,50,001, the rate of tax is 25% and, finally, for those earning more than ₹15,00,000 annually, the rate is 30%.
While tabling the Union Budget 2021-22 in Parliament, the minister said that the number of income tax return filers has increased to 6.48 crores now from 3.48 crores in 2014.
Relief for home buyers in Budget
The Finance Minister has also extended the tax exemption on affordable housing for a year. “This Government sees ‘Housing for All’ and affordable housing as priority areas,” she mentioned while presenting the Budget 2021. In July 2019 Budget, the central government provided an additional income tax deduction of up to ₹1.5 lakh for home loans to purchase affordable housing. FM Sitharaman extended the eligibility of this tax deduction till 31 March 2022.