Union Budget 2021: Key points for tax exemptions

In her Budget speech today at the Parliament, Finance Minister Nirmala Sitharaman announced that senior citizens above the age of 75 years who rely on pensions, interests as their only source of income will be exempted from income tax filing.

Announcing this provision, the Finance Minister said, “In the 75th year of Independence of our country, we shall reduce the compliance burden on senior citizens.”

“For senior citizens who only have a pension and interest income, I propose exemption from filing of income tax returns.”

Another major tax exemption has been proposed under the Atmanirbhar Bharat package under which the current basic tax exemption limit for an individual taxpayer has been increased from Rs 2.5 lakh to 5 lakh. The Standard Deduction Limit has also been doubled from its previous Rs 50,000 limit to now Rs 1 lakh.

These will prove to be a very significant reform in the taxation process as the taxpayer has been under high stress in lieu of the ongoing COVID-19 pandemic and the subsequent economic problems caused by it.

It would suffice to say that the tax relaxation that was being expected from the Budget has been met.

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