{"id":119374,"date":"2021-04-01T07:16:17","date_gmt":"2021-04-01T07:16:17","guid":{"rendered":"https:\/\/precoinnews.com\/?p=119374"},"modified":"2021-04-01T07:16:17","modified_gmt":"2021-04-01T07:16:17","slug":"how-these-changes-will-impact-your-savings-and-salaries-in-fy22","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/how-these-changes-will-impact-your-savings-and-salaries-in-fy22\/","title":{"rendered":"How these changes will impact your savings and salaries in FY22"},"content":{"rendered":"
From taxation of EPF contributions to new wage code, life won’t be the same in FY22.<\/strong><\/p>\n <\/p>\n From changes in taxation of EPF contributions, to the new wage code, a slew of changes have been proposed that will impact savings and salaries.<\/p>\n Some of the changes will come into force from Thursday and some others later in the year. Here is a look at some of the salient ones.<\/p>\n Changes that will come into effect from April1, 2021:<\/p>\n Interest on EPF self-contribution taxable above Rs 2.5 lakh<\/strong><\/p>\n Impact:<\/strong> For employees in the 30 per cent tax bracket, the post-tax return on contributions above Rs 2.5 lakh will be 5.85 per cent.<\/p>\n Only instruments like Public Provident Fund (6.4 per cent tax free), Sukanya Samriddhi Yojana (6.9 per cent tax free) give better returns.<\/p>\n Seniors above 75, who only have pension income, exempt from tax filing<\/strong><\/p>\n Impact:<\/strong> Life becomes easier for seniors. But they must check if they will still be exempt if they have income from tax-exempt sources, like PPF, agri income, etc.<\/p>\n Pre-filled income tax return forms<\/strong><\/p>\n Impact:<\/strong> Filing returns to become easier.<\/p>\n But taxpayers must take care to include any other income they may have.<\/p>\n Higher TDS\/TCS for not filing return<\/strong><\/p>\n Impact:<\/strong> Will discourage non-filing of returns by people who have paid substantial TDS\/TCS.<\/p>\n Reduced limit for reopening of cases<\/strong><\/p>\n Impact:<\/strong> Income tax assessment cases will not be reopened after three years.<\/p>\n Only in cases involving serious tax evasion, or concealment of income of more than Rs 50 lakh, can cases be reopened until 10 years.<\/p>\n Term plan premiums to go up<\/strong><\/p>\n Impact:<\/strong> A host of private life insurance companies are set to raise their term plan premiums by as much as 10-15 per cent due to increased comorbidity risks and adverse claims experience of reinsurers.<\/p>\n Changes that will come into force during the year<\/p>\n New Wage code implementation<\/strong><\/p>\n Impact:<\/strong> It requires an employee’s ‘wage’ to be 50 per cent of total salary. Employee’s basic salary is expected to rise.<\/p>\n PF contribution will increase, so take-home is likely to reduce.<\/p>\n Gratuity paid by employer will also rise due to higher basic salary.<\/p>\n RBI rule on standing instructions<\/strong><\/p>\n Impact:<\/strong> RBI has extended the deadline for all stakeholders to comply with the new auto debit terms, which otherwise would have impacted a lot of recurring payments made towards OTT platforms, bill payments, and insurance payments.<\/p>\n