There are a slew of reforms that go into effect from today as the new fiscal year begins. Many new rules will take effect on April 1st, ranging from reforms in airfare to standard insurance policies. From this month, interest received on employee's contributions above Rs 2.5 lakh in a year will be taxable, purchasing a pension cover will be faster, and the price of LPG will be lowered and so on. The following are the major changes that will take effect from today.
1. LPG Price
The Indian Oil Corporation Limited reported on Wednesday that the price of domestic LPG cylinders has been lowered by Rs 10 per cylinder. The decision will take effect from April 1st, according to the statement. In order to offer relief to domestic LPG customers, IOCL declared that the price of a domestic LPG cylinder has been lowered by Rs 10 per cylinder in Delhi, from Rs 819 to Rs 809 per cylinder, effective April 1, 2021. In other markets, the same cut has been implemented. In Kolkata, an LPG cylinder will now cost Rs 835.50. LPG cylinders will be available at Rs 825 in Chennai. Whereas the price of an LPG cylinder in Mumbai will cost you the same as in Delhi.
2. Air travel to become expensive
Air travel will become more expensive from this month. The Directorate General of Civil Aviation (DGCA), the aviation authority, has increased the air security fee (ASF). The increase in ASF for domestic passengers is Rs 40, while the increase for overseas passengers is Rs 114.38.
3. Saral Pension Policy
From April, the Insurance Regulatory and Development Authority of India (IRDAI) has mandated that all life insurance firms provide a standard individual immediate annuity plan. Saral Pension is a scheme that will offer a minimum of Rs 1,000 per month, Rs 3,000 per quarter, Rs 6,000 per half-year, and Rs 1,2000 per year. The minimum age to purchase this policy is 40 years old, and the highest age is 80 years old. This will be a non-linked, non-participating immediate annuity policy with a single premium.
4. Standard personal accident insurance policy
Starting from April 1, the insurance regulator has authorized both general and health insurers to provide a standard personal accident insurance policy. Saral Suraksha Bima, as its name suggests, will provide a minimum sum insured of Rs 2.5 lakh. The maximum sum insured under this scheme is Rs 1 crore. IRDAI stated that sum insured offers should be in multiples of Rs 50,000, but that insurers can offer more than that under this scheme. This policy is available to those above the age of 18. The maximum age limit is set at 70 years old.
5. Maturity gains in Unit Linked Investment Plan (ULIPs) to be taxed
The finance minister declared in Budget 2021 that if annual premiums are Rs 2.5 lakh or more, maturity gains in Unit Linked Investment Plan (ULIPs) would be taxed. If the maturity amount is a long-term gain, it will be taxed at a rate of 10%, and if it is a short-term gain, it will be taxed at a rate of 15%. The maturity proceeds of ULIP schemes were formerly tax-free. Only those ULIP policies purchased after February 1, 2021 will be affected. Those that pay annual premiums of less than Rs 2.5 lakh will also be eligible for tax deductions.
6. New deadline for filing the belated ITR or for revising a filed ITR
Previously, if you missed the 31 July deadline for filing your ITR, you could still file it by 31 March with a late fee. Likewise, whether you find an error or omission after filing your ITR, you have until March 31 of the same year to correct it. That being said, the Finance Bill for 2021-2022 proposes to shorten this time period by three months, allowing you to file a late ITR or revise your ITR until December 31 of the same fiscal year.
7. New tax rules on PF
Finance Minister Nirmala Sitharaman declared in Budget 2021 that interest on employee contributions to provident fund of over Rs 2.5 lakh per year would be taxed. Later, the Centre raised the deposit limit cap in provident fund to Rs 5 lakh per year, but interest will remain tax-free if no employer contribution is made. This limitation will only apply to contributions made on or after April 1, according to finance minister Nirmala Sitharaman. High-income earners and high-net-worth individuals (HNIs) will be impacted by this decision. Salaried employees who contribute more than the required 12 percent of basic pay in the Voluntary Provident Fund will also be affected.
8. For businesses with a turnover of more than Rs 5 crore, the HSN code is required
Businesses with a turnover of more than Rs 50 crore will be required to generate an e-invoice starting in April under the Goods and Services Tax (GST). Starting in April, the Harmonised System of Nomenclature, or HSN code, will be required on all tax invoices, according to the finance ministry. On B2B invoices, those with a turnover of up to Rs 5 crore in the preceding financial year must have a four-digit HSN code.
9. Senior citizens above 75 years exempted from filing ITR
Senior citizens above the age of 75 will be exempted from filing income tax returns if their only source of income is a pension or interest. It is important to remember that senior citizens over the age of 75 are not exempt from paying tax, but rather from filing an income tax return (ITR) if they meet certain criteria. Filing income tax returns will not be required for those aged 75 and over who only have pension and interest income starting from April 1.
10. Dividend income to be included in the ITR for the fiscal year ended on March 31, 2021
Dividend received from Indian companies and mutual fund schemes were tax-free in your hands until March 31, 2020, since the tax on the dividend or income distributed was paid by the company or mutual fund.
11. Extension the deadline for linking PAN with Aadhaar
Bearing in mind the problems resulting from the COVID-19 pandemic, the Central government on March 31 (Wednesday) extended the deadline for linking an Aadhaar number to a PAN from March 31, 2021 to June 30, 2021. "Date for issue of notice under section 148 of Income-tax Act,1961, passing of consequential order for direction issued by the Dispute Resolution Panel (DRP) & processing of equalisation levy statements also extended to 30th April, 2021," the I-T department stated in a recent tweet.
12. Interest rates of small savings schemes shall continue to be at the rates which existed in the last quarter of 2020-2021
The government today withdrew last evening's announcement of significant interest rate cuts on small savings schemes. The turnaround comes on the day of the second phase of state elections in Bengal and Assam. Nirmala Sitharaman, the Union Finance Minister, stated that the rate of interest on these deposits will remain unchanged until the final quarter of 2020-2021. On her recent tweet FM stated that "Interest rates of small savings schemes of government of India shall continue to be at the rates which existed in the last quarter of 2020-2021, i.e., rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn". Following the reset, here are the most recent small savings scheme interest rates.
- Post Office Savings Account: 4.1%
- Sukanya Samriddhi Account: 7.6%
- Public Provident Fund: 7.1%
- National Savings Certificate: 6.8%
- Kisan Vikas Patra: 6.6%
- Senior Citizen Savings Scheme: 7.6%
- Five-year recurring deposit: 5.8%
- Post Office Time Deposit: 5.5 per cent for one-year to three-year deposit and 6.7 per cent for 5-year deposit.
13. New deadline for processing recurring transactions
The Reserve Bank of India (RBI) on Wednesday extended the deadline for processing recurring online transactions by six months, giving relief to banks and wallets. Banks and financial institutions now have until September 30 to bring the new process in effect. The banking regulator in India implemented Additional Factor of Authentication (AFA) to make digital payments more secure and safe. From April 1, 2021, recurring transactions using debit cards, credit cards, the Unified Payments Interface (UPI), or other prepaid payment instruments (PPIs) will require an additional factor authentication (AFA), according to the central bank. Auto-payment or recurring transactions are commonly used to pay utility bills. Monthly subscription fees for streaming platforms such as Netflix, Amazon Prime, Disney+Hotstar are generally deducted directly from debit or credit cards. Banks will have to notify consumers of recurring payments at least 24 hours before the final debit to the card under the new rules. Users will receive the update via SMS or email. A customer's permission is needed to complete the transaction for the first time. According to the regulator, this extra step can be prevented for subsequent transactions. The auto-debit cap for cards and wallets has been set at Rs 5,000. An additional one-time password (OTP) will be required for transactions that exceed the cut-off. At any time, the customer will have the option to "opt-out of that particular transaction." Customers cannot be charged additional fees by banks or wallets for opting in or out to recurring payments. The framework's main goal, according to RBI, was to shield consumers from fraudulent transactions while also enhancing customer satisfaction.
14. New deadline for printing of QR code on B2C invoices
The government has postponed the requirement of printing dynamic QR code on B2C (business-to-consumer) invoices generated by businesses for three months, until July 1. Users can verify the details in the digitally signed e-invoice using a quick response code, or QR code. The Central Board of Indirect Taxes and Customs (CBIC) announced that the amount of penalty payable by a registered individual for non-compliance with the provisions of dynamic QR code in B2C invoices will be waived until June 30, 2021, subject to businesses complying with the rules starting from July 1, 2021.
15. New wage code put on hold
New salary rules for India will not take effect on today (April-1), which is positive news for millions of salaried workers. According to a senior Labour Ministry official, Prime Minister Narendra Modi's government has placed the new wage code, which may affect take-home salary, on hold for now. As a result of the Centre's decision to place new wage code rules on hold, three other codes, including the social security code, the code on industrial relations, and the code on occupational safety, health, and working conditions, will not be introduced starting from April 1, 2021.