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April 1 marks the beginning of the new fiscal year, 2020-21. Many new I-T rules are also coming into effect with the start of the new fiscal year.
Due to the 21-day lockdown across the nation to prevent the spread of coronavirus, the government has extended the deadline of some rules or procedures so that it will remain intact even after the commencement of new fiscal year. Income tax returns filing for the year 2018-19 has been extended, similarly, linking of pan card with Aadhaar card has also been extended to June 30.
Here are the new income tax rules, announced by Finance Minister Nirmala Sitharaman in Budget 2020, which will come into effect from April 1:
From April 1, the new tax slab will be effective, however the old tax slab will also remain in existence, Finance Minister Nirmala Sitharaman announced on February 1. This will allow people to select any one out of the two slabs, new or old.
Dividends earned from mutual funds or domestic firms will be taxable. Investors in higher tax brackets will be put under higher burden the whereas less burdened will put on those with lower tax brackets.
For employees, it will be taxable if the contribution to the NPS, EPF and pension fund exceeds Rs 7.5 lakh in a year. This new income tax rule will be applicable to both the old, as well as the new, slab.
The government has extended the date of additional tax benefit for one year till March 31, 2021 for those who are buying a house for the first time and its price is up to 45 lakh rupees. The landlord will get an opportunity to claim additional tax exemption of 1.5 lakhs on interest in addition to the existing Rs 2lakh tax rebate if he takes a loan to buy a house up to 45 lakhs.
The employees of startups get exemption from paying tax on the shares allotted within the ESOPs or Employee Stock Ownership Plan in this new income tax rules.