Part-2- Before Filing ITR for Assessment Year 2020-21, Know Important changes in Income Tax Act

 Now Time has come to be ready to file income Tax return for the Assessment Year 2020-21, however there are lot of changes have been made by the Government.

Some changes are more important to know because Income tax Return cannot be filed correctly if are ignorant of these.

I am just making an effort to cover such amendments/changes in a series like what would be Tax Rate for the Assessment year , changes in particular source of income i.e.salary, house property, Business or profession, capital etc.

In first part, we have included the rate of income Tax applicable for the Assessment year 2020-21 (Read Part -1 here) , now we will cover the changes made or brought in  "Exempt income" i.e. INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME  which are applicable for the Assessment year 2020-21 :-

INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME

1.  Section 10(4C) - Interest Income

Section 10(4C) is inserted to provide that specified interest income shall be exempt if the following conditions are fulfilled:

(a) the interest is payable to a non-resident (including a foreign company);

(b) the interest is payable by any Indian company or business trust;

(c) the interest is payable in respect of monies borrowed from a source outside India;

(d) the borrowing is by way of issue of rupee denominated bond referred to in section 194LC(2)(ia); and

(e) the bond is issued between 17th September 2018 & 31st March 2019.

2.  Section 10(12A)- Withdrawal from National Pension System (NPS)

Up to AY 2019-20 any payment from National Pension System (NPS) trust to an assessee on closure or opting out of scheme was exempt upto 40% of the amount payable to him.

In order to enable the pensioners to have more disposable funds, the exemption limit of 40% is increased to 60% from Assessment Year 2020-21

Thus any withdrawal up to 60% would not be taxable to the pensioners.

3.  Section 10(34A)

Consequent to the amendment in section 115QA providing for taxation of buyback of listed shares, section 10(34A) has been amended w.e.f. 05.07.2019 to provide that the exemption shall be available to all buyback of shares including those listed on a recognized stock exchange.

Read First Part by clicking here