Income Tax Budget 2021: Senior Citizens exempted from filing ITR; No change in Income Tax Slabs

The Union Budget 2021 has been presented by Finance Minister Nirmala Sitharaman on February 1, 2021, at 11 am. Amid the high expectations from the ‘budget like no other’, as promised by the Finance Minister, the budget doesn't see any change in the income tax structure.

After the economic destruction caused by the COVID-19 pandemic in 2020 which greatly impacted almost every sector, the salaried individuals were of the hope that the government might bring some tax advantages with Budget 2021.

However, the government has bought some relief for the senior citizens above the age of 75 years as well as have decided to introduce National Faceless Income Tax Tribunal.  Read below to know more about the announcements made by the Finance Minister regarding the tax structure.

Tax exemption extended on affordable housing:

In order to boost consumption and growth, Finance Minister Nirmala Sitharaman in Budget 2021 announced the extension of tax exemption on affordable housing for a year. Highlighting 'affordable housing' and 'Housing for all' as a priority area, the government extended the eligibility of tax deduction till March 31, 2021. 

In the Budget of July 2019, the government had provided an additional income tax deduction of up to Rs. 1.5 lakhs for home loans to purchase affordable housing. 

In order to ensure affordable housing for the migrant workers, the finance minister also announced the tax holiday extension for one more year for affordable rental housing projects. 

Reassessment of serious tax evasion cases:

Under serious tax evasion cases, only if there is evidence of concealment of income of Rs. 50 lakh or more in a year, the reassessment can be opened for 10 years. For others, the reopening of the assessment will only be for 3 years. 

Changes in Custom Duty:

• The custom duty on copper has been reduced to 2.5%

• For encouraging domestic value addition of the chemicals, the customs duty on Naptha has been reduced to 2.5%

• Custom Duty on silver and gold will be rationalized.

• The custom duties on the imported solar inverters have been increased from 5% to 20% and on solar lanterns, it has been increased from 5% to 15%

• There will be 5% customs duty on all the nylon products

• There will be a customs duty of 7% on Tunnel Boring Machines

• To benefit farmers, the government has decided to raise the customs duty on cotton from 0 to 10%

No announcement in the change in personal income tax slabs for 2021:

As rightly predicted by some of the experts, the Union Finance Minister Nirmala Sitharaman did not make any announcement reading the change in the tax slabs for the salaried individuals. The step can be seen in the light of changes in tax slabs that were already introduced in the budget of 2020 before the world was hit by the pandemic. 

Previous Income Tax Slab: