Income Tax Return Filing – New Dates & Deduction Benefits

Highlights of CBDT’s Notification dt. 24th June, 2020.

In view of the challenges faced by taxpayers in meeting the statutory and regulatory compliance requirements across sectors due to the outbreak of Coronavirus, on 31 March 2020 the Government has, extended various time limits in order to offer more relief to taxpayers for various compliances –

1. Deadline for filing the original as well as revised income tax returns for FY 2018-19 (AY 2019-20) has been extended to 31 July 2020.

2. The due date for the income tax return for the financial year 2019-20 (AY 2020 – 21) has been extended to 30 November 2020.

Therefore, the returns of income which are required to be filed by 31st July 2020 and 31st October 2020 is extended to November 30th, 2020. Consequently, the date for the furnishing tax audit report has also been extended to October 31st, 2020.

due date income tax return

3. In order to provide relief for small and middle-class taxpayers, the date of payment of self-assessment tax in the case of a taxpayer whose self-assessment tax liability is up to Rs. 1 lakh has also been extended to 30 November 2020.

However, it is clarified that there will be no extension of the date for the payment of self-assessment tax for taxpayers with a tax liability of more than Rs . 1 lakh. In this case, the full self-assessment tax is payable by the due dates set out in the Income Tax Act , 1961 (IT Act) and the late payment will attract interest pursuant to section 234A of the IT Act.

4. The date for making various investments/payments for claiming deduction under Chapter  VIA-B of the IT Act, which includes Section 80C (LIC, PPF, NSC, etc.), 80D (Mediclaim), 80 G (Donations), etc., has also been extended to 31 July 2020. As a result, the investment/payment may be made up to 31 July 2020 to claim the deduction under these sections for the year 2019-20.

5. The investment/construction/purchase date for claiming rollover benefit/deduction in respect of capital gain under sections 54 to 54 GB of the IT Act was also extended to 30 September 2020. Consequently, the investment/construction/ purchase made up to September 30th, 2020 will be eligible to claim capital gains deduction.

6. The date for the start of operation of the SEZ units for claiming deduction under section 10AA of the IT Act was also extended to September 30th, 2020 for units receiving the necessary approval by March 31st, 2020.

tds due dates

7. The furnishing of TDS / TCS statements and the issuance of TDS / TCS certificates is a requirement for allowing taxpayers to file their income return for FY 2019-20, the filing date for TDS / TCS statements and the issuance of TDS / TCS certificates for FY 2019-20 was extended to 31 July 2020 and 15 August 2020 respectively.

8. The date for passing of order or issuance of notice by the authorities and various compliance with various Direct Taxes & Benami laws needed to be passed / ordered / released by 31 December 2020, were extended to 31 March 2021. The deadline for connecting Aadhaar with PAN will also also be extended to 31 March 2021.

The Minister of Finance has already announced an extension to 31 December 2020 of the date for making payment without additional sum under the “Vivad Se Vishwas” scheme, required legislative amendments for which will be moved in due time. The said Notification has extended to 31 December 2020 the date for the completion or compliance of the actions required to be completed under the Scheme. Consequently, the date of declaration furnishing, order passing, etc. under the Scheme is extended to 31 December 2020.

Deferment of the implementation of the new approval / registration / notification procedure for certain entities u / s 10(23C), 12AA, 35 and 80 G of the IT Act has already been extended from 1 June 2020 to 30 September 2020,

The old procedure i.e. preamended procedure will continue to apply. Necessary legislative amendments in this regard shall be moved in due time.

The Finance Minister has already announced a reduced rate of TDS for specified non-salary payments to residents and a rate of TCS of 25 per cent for the period from 14 May 2020 to 31 March 2021.

Recent Post:-

  • Understanding Tax Deduction at Source (TDS)
    Understanding Tax Deduction at Source (TDS) Tax Deduction at Source (TDS) is a mechanism where income tax is automatically deducted from payments made to a person during specified transactions. This process ensures timely tax collection by the government by collecting the tax upfront. TDS is typically deducted on incomes such as […]
  • Filing your income tax return early this year? Understanding these 5 essential points is crucial.
    Filing your income tax return early this year? Understanding these 5 essential points is crucial. It is precisely 45 days since the end of the 2023–24 fiscal year, and there are 75 days remaining before the July 31 deadline for filing income tax returns (ITRs). This is a great moment for an individual […]

Exclude Income under Income Tax (Detailed Blog)

Exclude Income under Income Tax– Section 10

The different items of income referred to in the various clauses of section 10 are excluded from the total income of an assessee. These incomes are known as exempted incomes. Subsequently, such income will not enter into the calculation of taxable income.

Few of Income not taxable under Income Tax Act

AGRICULTURAL INCOME – SECTION 10(1)

Agricultural income is excluded under section 10(1).
However, agricultural income has to be aggregated with non agricultural income for calculating the rate at which non-agricultural income would be subject to tax, in case of individuals, HUF, AOP & BOIs etc., where the –
• agricultural income exceeds ` 5,000 p.a. and
• non-agricultural income exceeds basic exemption limit.
Below are the steps to be followed in calculation of tax –
Step 1: Tax on non-agricultural income plus agricultural income
Step 2: Tax on agricultural income plus basic exemption limit
Step 3: Tax payable by the assessee = Step 1 – Step 2
Step 4: Add Surcharge/Deduct Rebate u/s 87A, if applicable.
Step 5: Add Health and Education Cess@4%.

PARTNERS SHARE – SECTION 10(2A)

The partner’s share in the total income of the company or LLP is excluded from tax.

INCOME OF OFFICIAL OF AN EMBASSY, HIGH COMMISSION, ETC. – SECTION 10(6)

Remuneration received by a person, who is not a citizen of India, as an official of an embassy, high commission, legation, consulate or the trade representation of a foreign State or as a member of the staff of any of these officials would be excluded, subject to satisfaction of few conditions:

  1. These members of staff are subjects of the country represented and not engaged in any business or profession or employment in India else than as members of such staff.
  2. remuneration of corresponding officials of the Government resident for similar purposes enjoy similar exclusion in the other Country.

INCOME RECEIVED ON ACCOUNT OF ANY DISASTER – SECTION 10(10BC)

Compensation received or receivable from the Central Government, State Government or local authority by a person or his legal heir on account of any disaster is excluded except to the extent of loss or damage permitted as deduction under the Act.

SUKANYA SAMRIDDHI ACCOUNT – SECTION 10(11A)

Any payment from Sukanya Samriddhi Account

SCHOLARSHIP – SECTION 10(16)

The value of scholarship permitted to meet the cost of education would be excluded from tax in the hands of the recipient irrespective of the amount or source of scholarship.

DAILY ALLOWANCE – SECTION 10(17)

Daily allowance received by any Member of Parliament or of State Legislatures or any Committee thereof are excluded.

AWARDS – SECTION 10(17A)

Awards for literary, scientific and artistic works and other awards by the Government are excluded.

PENSION – SECTION 10(18)

Pension received by individual who has been in service of Central or State Government and has awarded “ParamVir Chakra” or “MahaVir Chakra” or “Vir Chakra” such other gallantry award as the Central Government notifies is excluded from tax.

SECTION 10(26)

Income from any source in the mentioned areas or States in which member of a Scheduled Tribe is staying or income by way of dividend or interest on securities is excluded in the hands of member of the Scheduled Tribe.

SIKKIM – SECTION 10(26AAA)

Income from any source in the state of Sikkim, dividend income and interest on securities is exempt in the hands of a Sikkimese person. This exclusion is not available to a Sikkimese woman who, on or after 1st April, 2008, marries a non-Sikkimese individual.

SUBSIDY FOR TEA – SECTION 10(30)

The amount of any subsidy received by any assessee engaged in the of growing and manufacturing tea in India through or from the Tea Board will be wholly exclude from tax.

SUBSIDY FOR RUBBER, COFFEE AND CARDAMOM – SECTION 10(31)

The amount of any subsidy received by an assessee engaged in the business of growing and manufacturing rubber, coffee, cardamom or other specified commodity in India from or through the Rubber Board, Coffee Board, Spices Board or any other will be excluded.

SECTION 10(35)

Any income received in respect of units from the Administrator of the specified undertaking/ specified company/ Mutual Fund shall be exempt. However, income originating from transfer of such units would not be excluded.

SPECIAL ECONOMIC ZONES (SEZS) – SECTION 10AA

Tax holiday for unit established in Special Economic Zones (SEZs), which has started or begins to manufacture or produce articles or things or provide any service on or after 1.4.2005 in any SEZ for 15 consecutive assessment years with respect of its profits derived from exports of such articles or things or export of services.

Amount of exemption = Profits of Unit in SEZ x Export turnover of Unit SEZ/Total turnover of Unit SEZ

100% of these profits would be excluded in the first five years, 50% in the next five years and in the last five years, 50% subject to transfer to SEZ Re-investment Reserve Account.

Enquire with Certicom Consulting in case of any further queries.

Income Tax Audit under Section 44AB

Income Tax Audit under Section 44AB – Criteria, Audit Report, Penalty

Before understanding what a tax audit is, let’s talk about the meaning of the term “audit“. The term “audit” means an official examination of the institution’s accounts and the production of the report, usually by an independent body/review or systematic evaluation of something.

Objectives of the tax audit

Tax audits are carried out to:

  • Ensure proper maintenance and correctness of the books of accounts and certificates by the tax auditor
  • Report the observations/inconsistencies noted by the tax auditor after systematic examination of the books of account
  • Reporting specific information such as tax depreciation, compliance with various provisions of the Income Tax Law and others. This, in turn, can also provide tax authorities time to verify the income tax return provided by the taxpayer such as gross income and claim. For deductions etc

Who is subject to tax review?

Who is subject to tax review

[maxbutton id=”3″ url=”http://certicom.in/contact-best-chartered-accountant/” ]

What is the audit report?

The tax assessor must submit his report in a specific form which can be either Form 3CA or Form 3CB where:

  • Form 3CA is eligible when a person engaged in a business or profession has already been charged with auditing his accounts under any other law.
  • Form 3CB is submitted when the person conducting a profession or profession is not required to audit under any other law

In the case of any of the above audit report, the tax auditor is also required to provide the details specified in Form 3CD which forms part of the audit report.

How and when is the tax audit report submitted?

The tax assessor must submit an online tax audit report using his / her login details as a “Chartered Accountant”. The taxpayer must add CA details in their login portal. Once the audit report is downloaded by the tax assessor, the same amount must be accepted or rejected by the taxpayers in their login portal. If it is rejected for any reason, all procedures must be followed again until the audit report is accepted by the taxpayer.

A tax audit report must be submitted on or before the due date of the income return on November 30 of the following year if the taxpayer enters into an international transaction and 30 September of the following year in the case of other taxpayers.

Consequences of non-compliance

If any taxpayer is required to perform a tax audit but fails to do so, 0.5% of total sales, turnover, total receipts, or 150,000 rupees may be imposed as a fine. However, if a reasonable reason for non-compliance is established, no penalty will be imposed.

[frontpage_news widget=”2157″ name=”Tax Update”]

[frontpage_news widget=”879″ name=”Certicom – A Group of Chartered Accountants – Articles”]