3 Income Tax Updates You Need to Know About in July

July is here and with it, new Income Tax updates. Here are three major changes you need to know about:

For salaried taxpayers, July 31 is the deadline for submitting ITR. The Income Tax department has tweeted that more than 2 crore ITRs have already been filed electronically for FY 2022-23. In addition, new GST norms stipulate that GST will apply to all unregistered persons. As a result, if you have not filed your ITR on time, you may face penalties. To avoid such penalties, submit your ITR before July 31.

If you have additional income after the filing date, you can file an updated ITR using ITR-U. However, it is imperative to note that you can only file one updated return per assessment year. Moreover, you can’t submit a detailed income break-up for more than two years. You must specify how much additional income you have earned during the assessment year, the prescribed heads, and the reasons for filing an updated return. If your income has fluctuated significantly, you should submit the latest information in your return.

Individuals are now required to file their Income Tax Returns if they have TDS and TCS payments over Rs 25000 per year. However, the TDS and TCS limit is still set at Rs 50,000 for taxpayers who are sixty years of age or older. Additionally, professional income earners and businesses with a turnover of more than Rs 10 lakh per year must file ITRs. Bank savings account depositors must file tax returns as well.

As we enter the new fiscal year, it is important to take a closer look at upcoming changes in income tax laws. There are new rules and provisions that are phasing in and adjusting for inflation, which are likely to affect your bottom line. Knowing which tax laws will change during these years will help you make a better decision on when and how to file your income tax return. The changes will be more important than ever, so it’s critical to plan ahead.

A key change is the minimum age to claim the EITC. Beginning in 2022, the minimum age for claiming the EITC will jump to 25. This is a significant change, as the maximum credit available to childless taxpayers will drop from $1,502 to $560. The phase-out rules for former foster youth and homeless youth have also been dropped from the 2020 tax year. This could make the next two years very stressful for many taxpayers.

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