The Finance Ministry has released Rs 9,871 crore as a grant to 17 states.

The Finance Ministry has released Rs 9,871 crore as a grant to 17 states.

The Finance Ministry announced on Tuesday that it had released the fifth monthly instalment of the revenue deficit assistance to 17 states, totalling Rs 9,871 crore. Article 275 of the Constitution provides the states with the Post Devolution Revenue Deficit Grant.

The grants are distributed in monthly instalments in accordance with the 15th Finance Commission’s recommendations to close the revenue gap in the governments’ accounts following devolution. The commission has recommended that the 17 states get this award in the years 2021-22.

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On August 9, 2021, the Department of Expenditure released the fifth monthly instalment of the Post Devolution Revenue Deficit (PDRD) grant to the states, totalling Rs 9,871 crore, according to a statement from the ministry.

In the current financial year, a total of Rs 49,355 crore has been distributed to eligible states.

Andhra Pradesh, Assam, Haryana, Himachal Pradesh, Karnataka, Kerala, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Rajasthan, Sikkim, Tamil Nadu, Tripura, Uttarakhand, and West Bengal are among the states nominated for the PDRD Grant by the Fifteenth Finance Commission.

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In the financial year 2021-22, the Fifteenth Finance Commission has suggested a total PDRD Grant of Rs 1,18,452 crore for the 17 states. So far, Rs 49,355 crore (41.67 per cent) has been released from this total.

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1. Income Tax Return (ITR) filing for  Financial Year 2020-2021 has started. 30.09.2021 is the Last date for Income Tax Return filing for Assessment Year 2021-22 (Financial Year 2020-21).

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2. Benefits of Income Tax Return (ITR) filing:

a) Claiming Tax Refund
b) Loans processing gets easier
c) Credit cards processing gets easier
d) Visa processing gets faster
e) Set off & Carry forward of losses
f) Serves as proof of income
g) Serves as address proof
h) Buying a high life insurance cover
i) Helpful for those with small or nil income
j) Proof of accumulated earnings over the years
k) Avoiding potential Income Tax notices for non-filing of ITRs

Digital payments up 30.2% in FY21: According to RBI data

3. Indian investment in cryptocurrencies grew from $923 million in April 2020 to nearly $ 6.6 billion in May 2021. The crypto investment by Indians has grown despite no clear regulation on this from the RBI or the Government. The RBI had tried to impose a kind of ban in 2018 by restricting banking facilities to crypto exchanges, which was later ruled out by the Supreme Court.

4. Ministry of Corporate Affairs has recently mandate One Person Company (OPC) and Small Company vide notification dated 5th March 2021 to file its annual return from the financial year 2020-2021 onward in Form No: MGT-7A under Section 92 of the Companies Act, 2013. This action is taken by MCA for giving clarity and reducing the burden of Small Companies and OPC.

5 financial tasks to finish in April

1. Start tax planning for the year

The Financial Tasks mainly includes tax planning, Since tax planning season is still a long way off, few people are thinking about tax savings right now. However, experts advise that you begin tax preparation in April rather than waiting until the last few weeks of the fiscal year and making hasty decisions. Start a SIP in a tax-saving fund right away if you want to invest in ELSS funds. You should have completed 10-12 SIPs by February-March. Starting early also means you won’t run out of cash at the end of the year due to the clumping of tax-saving savings. You’ll have plenty of time to choose the best choice.

Our research shows that investors who took the SIP route earned more than those who waited till March to invest in ELSS schemes. Staggering the investments across 12 months not only cushions you against volatility, but also lightens the burden at the end of the financial year. 

2. To stop TDS, file types 15H or 15G.

To avoid TDS on dividends and interest income, apply Form 15G (for those under 60) or Form 15H (for senior citizens) now. There are certain prerequisites that must be met first. If gross interest income does not surpass the permissible exemption cap (Rs 2.5 lakh) and total income is tax-free, Form 15G may be filed. Form 15H is for senior citizens who have no projected tax liability for the fiscal year. Every year, the forms must be filled out again. Banks now allow for the submission of these forms online, which is a convenient choice for senior citizens, particularly in these times.

3. Invest in a PPF account.

The Public Provident Fund will have better returns than the taxable Provident Fund for investors in the 20% tax band and above.

If you contribute more than Rs 2.5 lakh to the VPF per year but do not have a PPF account, you can open one right away. The PPF will collect 7.1% tax-free returns, compared to 5.85% in the 30%  tax bracket and 6.8% in the 20% tax bracket for Provident Fund. You can open a PPF account online with some banks, such as HDFC Bank and ICICI Bank. Since the PPF has a Rs 1.5 lakh annual investment quota, it cannot fully replace the VPF. Furthermore, if government bond yields continue to fall, rates will fall in the future.

And interestingly if you invest in PPF month on month then it is best to contribute by the 5th of every month as the interest calculation is done on the balance on that day of the month.Also, there can likely be a case that after the political reasons due to which the small savings rate cut was reversed, may still propel the government to again reduce the key small savings rate. So, better to lock in investments at a higher return.

financial tasks

4. Invest in small-scale savings plans.

The government reversed its decision to cut interest rates, giving investors in small savings schemes some relief. However, since government bond yields have been on a downward trend for many months, the rates are likely to fall. Current investments in the PPF and the Sukanya Samriddhi Yojana would be impacted if rates are cut. However, the rate will not adjust in many other schemes, such as the Post Office Monthly Income Scheme, Kisan Vikas Patra, NSCs, and Senior Citizens’ Saving Scheme, until the end of the term. It’s a good idea to lock in these schemes’ current rates before the next round of rate cuts.

THE FINANCE ACT 2021 AMENDS THE CENTRAL GOODS AND SERVICE TAX ACT, THE INTEGRATED GOODS AND SERVICE TAX ACT, AND THE CENTRAL SALES TAX ACT. 

5. You may also contribute more to your EPF:

You can also increase your employee contribution if your wage increases or your discretionary income requires it. But keep in mind that there is a new tax restriction in place for EPF as of this year. Any donation to a PF account that exceeds Rs. 2.5 lakh in a year will now be subject to taxation. To take advantage of rupee cost averaging and to get your investment up to par with your salary increase, consider increasing your investment in other financial assets such as SIPs. As a result, you will be able to achieve your long-term financial goals early in life.