Income Tax: 5 New Rules will be Effective From April 01 2022

Income tax rules are constantly changing and it is very important for the taxpayers to be aware of them. The financial year for the purpose of income tax is from 1st April to 31st March. Presently the financial year 2022-23 is going on. For this financial year, some changes have been made in the tax related rules by the Income Tax Department, which will be applicable throughout this financial year. Let us take a look at some of these important changes.

NPS Contribution

The Center already contributes an equivalent of 14% of the basic salary to the NPS (National Pension Scheme) account of its employees. From this financial year, state government employees will also receive a contribution equal to 14% of the basic salary in their NPS account from the state government. In fact, the employer’s (in this case the government) contribution to the NPS for state government employees has been increased from 10% to 14% of the basic pay, similar to that of central government employees, though non-government employees. For it has not been extended.

Contribution to EPFO

Employees contribute up to 12% of their basic salary in EPF, but according to the new rules, employees can contribute more than this amount as voluntary contribution. But with this a big condition was added. Till now, the entire contribution to EPFO ​​used to be tax-free income, but now if your contribution to EPFO ​​as an employee is more than Rs 2.5 lakh per annum, then the interest income tax on contributions above the limit of Rs 2.5 lakh- would be eligible. For government employees, this limit is Rs 5 lakh.

Taxpayers will be able to file updated Return

As per the new provisions, taxpayers have been allowed to file an updated income tax return for payment of additional tax as and when required. These updated returns can be filed within two years from the end of the relevant assessment year. This special feature is of great importance. Allowing for revised ITR filing will help taxpayers to make voluntary declaration of any missed income and avoid legal action. This will benefit both the government and the taxpayer.

Tax on Virtual Digital Assets

Virtual digital assets would include cryptos such as bitcoin, ethereum, and other digital assets such as non-fungible tokens (NFTs), etc. Now income from such assets will be taxed. Income from the transaction of any virtual asset such as bitcoin will be taxed at the rate of 30%. This rule has come into effect from 1 April. Apart from this, 1% TDS will also be deducted on payment made for virtual asset transfer which will be applicable from 1st July 2022. Not only this, the recipient of the virtual digital asset as a gift will also have to pay tax on it.

Post Office Savings Scheme

In case of post office, EPF, SCSS and fixed deposit accounts, the government has made it mandatory to credit monthly, quarterly and annual interest for the use of savings account. If you make cash withdrawal of interest amount from Post Office, MIS, SCSS and FD Fixed Deposit, you will not be able to do so after 1st April 2022.