ITR filing 2021: New vs old tax regime, Covid-19 relief and more

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The assessment year 2021-22 is the first time when taxpayers will have an option to choose between the new and old tax regime. Since the new regime doesn’t offer investment, loans or insurance-linked tax deductions, if you are eligible for it you should stick to the old regime. “Do the number crunching well to make a wise decision,” says Anurag Jain, Partner, BytheBook Consulting LLP.

He further advises employees to intimate their employers well in time to get a TDS deduction as per the new tax regime. Employers may switch between the new and old tax regimes by filling up Form 10-IE. However, self-employed people don’t enjoy this flexibility.

Jain further talks about tax relief offered in case of medical treatment for Covid-19. Any ex-gratia payment by the employer to employees for medical treatment of self or family will be tax-exempt. Donations received from family and friends have been capped at Rs 10 lakh. “The government has only issued a press release in this regard so far. Legislative amendment is yet to be done,” says Jain.

Jain further talks about taxation rules linked to cryptocurrencies. “Even as there are no defined guidelines by the government on gains incurred in cryptocurrencies, one must disclose it in ITR depending on the duration of the trade. If gains are booked frequently, it can be treated as business income and if one stays invested for the long-term, it will be considered as capital gains,” says Jain.