As the financial year 2020-21 ends, you have less than a day to invest or spend to be eligible for tax exemptions. Government employees have to submit their leave travel concession cash voucher on Wednesday to get the tax exemptions they are eligible to. This is also the last day to submit any corrected tax returns for 2019-20 without attracting fines.
More importantly, your PAN (Permanent Account Number) would be void if you do not link it to Aadhaar.
RBI’s changed guidelines means that you may not be able to auto-pay mobile bills and utility bills from your bank accounts, payment wallets or credit cards after Wednesday. The new guidelines require the banks to remind the account holders of the auto-pay at least a day in advance and get their permission before paying. If the bill amount is more than Rs 5,000, a one-time password may have to be employed.
The financial institutions have asked for more time to implement the changes but the RBI is yet to respond positively. Financial institutions said they do not have the technical systems in place to comply with the RBI guidelines. So you may have to pay your bills the old-fashioned way from Thursday.
Filing tax returns
The financial year starting Thursday brings in several changes to the way you manage your personal finance. If your Employee Provident Fund investment exceeds Rs 2.5 lakh in a year, you will have to pay taxes on the interest accrued on the excess amount.
If you have not filed income tax returns for two years, your TDS (tax deducted at source) and TCS rates would be doubled.
The Income Tax department will record more information in the tax returns forms from next financial year. Apart from the currently recorded salary and advance tax details, income from other sources will also be recorded.
Invalid passbooks and cheque books
Pass books and cheque books issued by eight banks will be invalid from Thursday. Dena Bank, Vijaya Bank, Corporation Bank, Andhra Bank, Syndicate Bank, Oriental Bank of Commerce, United Bank and Allahabad Bank passbooks and cheque books will no longer be valid because they have been merged to other banks. If you have an account with any of these banks you have to go to the branch of the bank which took over your bank to collect new passbooks and cheque books. Your IFS Code and MICR code will also change.
Dena Bank and Vijaya Bank have been merged into the Bank of Baroda. Oriental Bank and United Bank have been merged into the Punjab National Bank. The Syndicate Bank has been merged into Canara Bank while Andhra Bank and Corporation Bank have been merged into the Union Bank of India. Allahabad Bank has been merged into Indian Bank.
Changing salary structure
Though the Labour Codes passed in Parliament are yet to be notified, they are expected to be applicable from the start of the new financial year. This will significantly change the salary structure. Basic pay should be at least 50 percent of the total payout. That means an increase in other components such as the Provident Fund contribution which is calculated as a percentage of the basic pay.
Your take home may go down but PF contributions and gratuity may increase.
Compulsory GST invoice
The Goods and Services Tax regime is also about to undergo changes. E-invoicing will be made compulsory for all business-to-business transactions done by traders with an annual turnover exceeding Rs 50 crore. Those traders who come under the e-invoicing mandate have to invoice debit and credit notes in addition to goods and services. Invoicing should be done before the movement of goods.
They can register on the GST common portal or the invoice registration portal https://einvoice1.gst.gov.in.
In the absence of e-invoicing, those who receive the goods will not be eligible to get the input tax credit under the GST.
Certain sections like SEZ units, insurers, banks including non-banking financial companies, goods transport agencies, passenger transport services and multiplexes have been excluded from the requirement for e-invoicing.