Budget 2021-22 | FM Sitharaman reduces timeline on reopening of tax assessments to 3 years versus 6 years

The Union Finance Minsiter Nirmala Sitharaman, while reading out the Union Budget 2021-21 in the Lok Sabha on February 1, announced that reopening of tax assessments to take place till 3 years vs earlier time limit of 6 years.

Apart from this, the Union Minister relaxed Income tax (I-T) filing for senior citizens above 75 years of age having only pension.

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The income tax regime was revised in the Budget 2020 and under that the basic income tax exemption limit for senior and super senior citizens was made equal to that of non-senior citizens, i.e. Rs 2.5 lakh instead of the earlier Rs 3 lakh for senior citizens and Rs 5 lakh for super senior citizens.

Further those individuals aged over 60 years would therefore get more tax relief in the old tax regime if their income is up to Rs 5 lakh.

In the previous tax system, senior citizens were given relaxations if they yearly earning falls below Rs 3 lakh. While, they were supposed to pay 5 percent of their income if they earn between Rs 3 lakh and Rs 5 lakh. For those earning between Rs 5-10 lakhs had to pay 20 percent, while have to pay 30 percent as taxes if their yearly earnings exceed Rs 10 lakhs.