Finish these 5 things before Income Tax rules change on April 1
The new financial year will start from April 1, 2022, and from this day many rules related to income tax will be changed. These include many things from income tax on crypto assets to filing updated returns, new tax rules on EPF and tax exemption on treatment of Covid-19. Here we give you details on all the tax related changes that will happen from April 1.
Tax on profits from crypto
The tax on income from cryptocurrencies will be applicable from April 1. With the beginning of the financial year, tax of 30% will be applicable on the income, while TDS of 1% will be applicable from July 1, 2022. Finance Minister Nirmala Sitharaman made it clear in Budget 2022 presented on how much tax would be levied on earnings from crypto assets.
For Individuals/Hindu Undivided Family (HUF) who get their accounts audited under the I-T Act, the TDS limit will be Rs 50,000 per annum.
No relief on losses in crypto
If there is profit in crypto then tax has to be paid to the government. But on the contrary, if you have a loss in any digital asset, then you will not be able to get that loss set-off with your profit. For example, you buy two digital assets Bitcoin and Shiba Inu. Make a profit of Rs 100 in Bitcoin and lose Rs 100 in Shiba Inu.
In this case, you will have to pay 30% income tax on the profit made from Bitcoin (Rs 100). In return, the Rs 100 that you have lost in Shiba Inu will be yours. You will not be able to set-off that loss with the profit made from Bitcoin. Whereas investing in the Indian stock market has the option of set-off.
File updated IT returns
In the new financial year, a special facility has been given to the income tax payers that if they want to fill ITR again by rectifying any mistake or mistakes, then they have the option to do so. Taxpayers can now file an updated return within two years from the relevant assessment year.
NPS deduction for state government employees
State government employees will now be able to claim deduction under section 80CCD(2) for NPS contribution up to 14% of their basic salary and dearness allowance by the employer, which will be in line with the deduction available to Central government employees.
Tax on PF account
The Central Board of Direct Taxes (CBDT) has decided to implement the Income Tax (25th Amendment) Rules, 2021 from April 1. This means that if you put only up to Rs 2.5 lakh in your EPF account, then it will be tax free. If you put more money than this, you will have to pay tax on the interest earned.
Tax relief on cost of Covid-19 treatment
As per the June 2021 press release, tax exemption has been provided to individuals who have received funds for Covid-19 medical treatment. Similarly, money received by family members on the death of a person due to Covid will also be tax exempt.
But there is a condition in this, that the money should be received within 12 months of the death of the person who died of Covid-19 and it should not exceed Rs 10 lakhs. This rule will come into effect from April 1, 2022.