CBDT has extended the deadlines for filing ITRs and submitting tax audit reports for FY 2020-21.

CBDT has extended the deadlines for filing ITRs and submitting tax audit reports for FY 2020-21.

For the fiscal year 2020-21, the Central Board of Direct Taxes (CBDT) has extended the deadlines for filing tax audit reports and income tax returns for a select group of taxpayers. The income tax agency announced this in a news statement on January 11, 2022.

The ITR deadline extension has come after many taxpayers urged the tax department and finance ministry to extend the ITR reporting dates due to the mounting coronavirus cases and challenges with the new income tax system. “On consideration of difficulties reported by the taxpayers and other stakeholders due to COVID and in electronic filing of various reports of audit under the provisions of the Income-tax Act, 1961, the Central Board of Direct Taxes has decided to further extend the due dates for filing of income tax returns and various reports of audit for the assessment year 2021-22,” said the press release.

Various tax organisations, taxpayers, and tax professionals have petitioned the government to extend the deadline for submitting tax audit reports and filing ITRs for this group of people. The hashtags were trending on Twitter, with tax experts and numerous chartered accountant groups pleading with the government to extend the deadlines.

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According to the department’s news release:

  • The due date of furnishing of report of audit under any provision of the Income-tax Act for the financial year 2020-21, which was 30th September, 2021, in the case of assessees referred in clause (a) of Explanation 2 to sub-section (1) of section 139 of the I-T Act, as extended to 31st October, 2021 and 15th January, 2022 by Circular No.9/2021 dated 20.05.2021 and Circular No.17/2021 dated 09.09.2021 respectively, is further extended to 15th February, 2022;
  • In the case of assessees referred to in clause (aa) of Explanation 2 to sub-section (1) of section 139 of the Act, the due date for producing an audit report under any provision of the I-T Act for the financial year 2020-21, which was 31st October 2021, has been extended to 15th February 2022.
  • The due date for furnishing a Report from an Accountant by persons entering into international transactions or specified domestic transactions under section 92E of the Act for the previous year 2020-21, which was 31st October 2021, has been extended to 30th November 2021 and 31st January 2022, respectively, by Circular No.9/2021 dated 20.05.2021 and Circular No.17/2021 dated 09.09.2021.
  • The due date for furnishing a return of income for the financial year 2020-21 (assessment year 2021-22), which was 31st October, 2021 under sub-section (1) of section 139 of the Act, was extended to 30th November, 2021 and 15th February, 2022 by Circular No.9/2021 dated 20.05.2021 and Circular No.17/2021 dated 09.09.2021 respectively, is now extended to 15th March, 2022;

Why may the cap on tax-saving deductions under section 80C be increased in Budget 2022?

“It is also clarified that the extensions of the dates referred to in clauses (12) and (13) of Circular No.9/2021 dated 20.05.2021, clauses (4) and (5) of Circular No.17/2021 dated 09.09.2021, and in clauses (4) and (5) above shall not apply to Explanation 1 to section 234A of the Act, in cases where the amount of tax on the total income as reduced by the amount as specified in clauses I to Further, The tax paid under section 140A of the Act within the due date (without extension under Circular No. 9/2021 dated 20.05.202, Circular No. 17/2021 dated 09.09.2021 and as above) provided in that Act shall be deemed to be the advance tax in the case of an individual resident in India referred to in sub-section (2) of section 207 of the Act.”

“The CBDT’s announcement earlier today that the deadlines for filing tax returns and some audit reports will be extended to March 15 and February 15 is a huge relief, given the difficulties faced by both taxpayers and their advisors due to emerging virus variants and faults in the online portal. The announcement’s timing, in particular, reduces anxiety for all parties involved “Vishweshwar Mudigonda, Partner at Deloitte India, echoed this sentiment.

Do keep in mind that for people (who accounts are not needed to be audited) filing income tax return using ITR-1, ITR-2 and ITR-4, the deadline for ITR filing for FY 2020-21 has ended on December 31, 2021.

Changes to the Income Tax Slab and Rates are expected in the Budget: Will the Rs 2.5 lakh Basic Exemption Limit be Increased?

  • 25 Jan 2022
  • Budget, Income Tax
  • Comments Off on Changes to the Income Tax Slab and Rates are expected in the Budget: Will the Rs 2.5 lakh Basic Exemption Limit be Increased?

Changes to the Income Tax Slab and Rates are expected in the Budget: Will the Rs 2.5 lakh Basic Exemption Limit be Increased?

Income Tax Slab, Rates Changes Expected in Budget 2022

The Union Budget 2022 is expected to provide significant tax relief to taxpayers. In a pre-budget study recently conducted by KPMG, most of the respondents stated they expected an expansion in the basic income tax exemption level of Rs 2.5 lakh.

“On the individual tax front, most respondents anticipate an increase in the INR2.5 lakh basic income tax exemption level. “Respondents also support an increase in the present section 80C deduction ceiling of INR 1.5 lakh, as well as an upward revision in the top income band of INR 10 lakhs and above,” according to the poll study.

The fundamental exemption limitations were last updated in 2017-18, according to Abhishek Soni, Co-founder and CEO of Tax2win. As a result, it is envisaged that the basic exemption ceiling would be increased in this budget, allowing middle-class taxpayers to lower their tax payment to some extent.

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During the study, respondents were questioned about the most anticipated change for individual taxpayers, and the following replies were given:

  • The government should raise the income cap of Rs 10 lakh at which the maximum marginal rate of 30% tax is triggered, according to 29% of respondents.
  • The Section 80C deduction ceiling of Rs 1.5 lakh was hoped for by 36% of respondents.
  • For the salaried class, 19% of respondents predict an increase in the standard deduction ceiling of Rs 50,000.
  • With work from home arrangements in mind, 16 percent foresee tax-free allowances/perks for paid employees.

Limits under Sections 80C and 80D have been raised.

“The government should offer a separate deduction under Section 80C for house loan principal repayment.” For a long time, the limit under Section 80C has not been changed, and many things are already covered or qualify within the limit of Rs. 1,50,000. As a result, there is a good likelihood that it will be improved this year.”

“Furthermore, given the rise in real estate prices over time, the government should enable a separate deduction for principal repayment of home loans, rather than including it in the section 80C limit,” he added.

Because the restrictions on Section 80C and Section 80D have been unchanged for so long, they are almost certain to be raised this year. Additionally, substantial direct tax collections this fiscal year may aid in the modification of these ceilings upward.

“A bigger deduction under Section 80C for the Equity-Linked Savings Scheme (ELSS) might be allowed, or a separate maximum should be set to encourage additional mutual fund investments in India,” says the report.

A new tax system has been implemented.

“Many experts believe that the two tax regimes continue to perplex the average person. To make the new regime more appealing, the government may consider raising the maximum tax slab from Rs.15 lakh to Rs.20 lakh, or allowing certain deductions. The salaried class did not receive any significant relief in Budget 2021.”

The govt has extended the deadline for filing corporate ITRs for FY21. 15th of March, tax audit report due by February 15th

Changes to the Standard Deduction Limit

This budget is likely to boost the standard deduction limit from Rs. 50,000 to Rs. 1,00,000. This would lessen the tax burden on employees while also taking into account the rate of inflation and the purchasing power of salaried individuals.

Tax-free work-from-home allowances for paid employees may be introduced in Budget 2022. Allowing such deductions will increase take-home pay, resulting in increased demand for goods and services in the country. “Given this fiscal year’s high direct tax collection, there may be room to enhance tax deduction limitations.” For example, the standard deduction given to individuals on salary income, which is presently Rs.50,000, may be increased. Every year, this might be modified for inflation.”

Isn’t there going to be a change in the tax rate?

Despite all of the high hopes for Budget 2022, EY experts believe that business and personal tax rates would remain unchanged this year. “Corporate and individual tax rates are anticipated to remain unchanged.” The standard customs duty rate may not change. There may be some change in duty rates in India to encourage value addition and straighten the inverted duty structure,” says the report.

Have an Aadhaar card? At incometaxindia.gov.in, use it to apply for an Instant e-PAN

Have an Aadhaar card? At incometaxindia.gov.in, use it to apply for an Instant e-PAN

There are specific documents that you must have in order to confirm your identification and to receive government benefits. Aadhaar Card is one of these papers. Permanent Account Number (PAN card), and Voter ID are just a few examples. Do you have them all? If not, you can apply for all of these IDs by visiting the relevant websites. If you have an Aadhaar card, you can apply for an e-PAN with your Aadhaar number. It should be noted, however, that this service is only available if you do not have a PAN but do have a valid Aadhaar card and your KYC information is up to date.

The Unique Identification Authority of India (UIDAI) issues Aadhaar cards, which can be used to gain benefits such as submitting Income Tax Returns, opening a bank account, and so on. The Income Tax Department is in charge of issuing the PAN Card. For the uninitiated, an e-PAN is a digitally signed PAN card issued by the Income Tax Department in electronic or digital format.

You should be aware that quoting your PAN when filing your income tax return is required. If you do not yet have a PAN, you can get an e-PAN by using your Aadhaar number and a mobile number associated with your Aadhaar. Additionally, generating an e-PAN is a free, online process that does not require you to complete any documents.

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Step-by-step instructions on how to apply for an e-PAN using Aadhaar.

Step 1: Go to the Income Tax Department’s official website or go to the https://www.incometax.gov.in/iec/fo portal.

Step 2: From the homepage, select the ‘Instant E-PAN’ option from the ‘Quick Links’ area.

Step 3: A new page will open; select ‘Get New e-PAN’ from the drop-down menu.

Step 4: Next, for PAN allocation, input your Aadhaar number and check the ‘I confirm that’ box before pressing the ‘Continue’ button.

Why may the cap on tax-saving deductions under section 80C be increased in Budget 2022?

Step 5: On your registered mobile number, you will receive an Aadhaar OTP. You must enter the OTP in the appropriate field and then click the ‘Validate Aadhaar OTP and Continue’ button.

Step 6: Click the Continue button after accepting the terms and conditions on the OTP Validation screen.

Step 7: Enter your OTP, check the box, and press the Continue button again.

Step 8: If your email ID has not been authenticated, click Validate email ID, enter your credentials, and click the Continue button.

Step 9: After you submit your Aadhaar details for validation, you will be granted an acknowledgment number. Entering your Aadhaar number will allow you to check the status of your PAN allotment.

Step 10: To download the e-PAN, complete the first two steps, then click the ‘Check Status/Download PAN’ option, enter your Aadhaar number and captcha code, touch the Submit icon, validate by entering the OTP, and finish the process.

Step 11: If the PAN allocation was successful, a PDF file link will be sent to you within 10 minutes.