From taxation of EPF contributions to new wage code, what to expect in FY22

 Here is a look at some of the salient ones

From changes in the taxation of EPF contributions to the new wage code, a slew of changes has been proposed that will impact savings and salaries. 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.

Changes that will come into effect from today

> Interest on EPF self-contribution taxable above Rs 2.5 lakh

Impact: For employees in the 30 percent tax bracket, the post-tax return on contributions above Rs 2.5 lakh will be 5.85 percent. Only instruments like Public Provident Fund (6.4 percent tax-free), Sukanya Samriddhi Yojana (6.9 percent tax-free) give better returns.

> Seniors above 75, who only have pension income, exempt from tax filing:

Impact: 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.

> Pre-filled income tax return forms:

Impact: Filing returns to become easier. But taxpayers must take care to include any other income they may have.

> Higher TDS/TCS for not filing the return

Impact: Will discourage non-filing of returns by people who have paid substantial TDS/TCS.

> Reduced limit for reopening of cases:

Impact: Income tax assessment cases will not be reopened after three years. Only in cases involving serious tax evasion, or concealment of income of more than Rs 50 lakh, can cases be reopened until 10 years.