Direct Taxes: Highlights of the RACP Bill 2020 introduced in Lok Sabha

1. ITR filing to be extended from 30 Sep to 31-3-2021 for AY 2019-20.

2. ITR filing to be extended from 30 Nom to 31-3-2021 for AY 2020-21.

3. Filing of audit reports  for AY 2020-21 under any provision is to be extended from 31 October to 31-3-2021.

4. TDS / TCS returns for Feb & March 20 and Q 4 for March 20 (as the case) are to be extended to 31-3-2021 under all subsections.

5. The furnishing of certificate u/s 192 is to be extended from 15th of August to 31-3-2021.

6. Sections 54 to 54GB

  • The deadline for completion or compliance shall be extended from 29 September to 31-12-2021.
  • For making Such completion or compliance shall be extended from 30th September to 31-3-2021.

7. Chapter – VI A under heading B –

  • The deadline for completion or compliance is to be extended from 30 July to 31-12-2020.
  • The deadline for such completion or compliance shall be extended from 31 July to 31-3-2021.

8. Vivad se vishvas act-20

  • Time period to be extended from 30 Dec 20 to 31-12-2020.
  • Completion or compliance is to be extended from 31st december 2020 to 31-3-2021.

9. No extension of payment of taxes.

10. Interest rate for late payment of taxes 3/4 percent  pm or part of there of.(Only if the tax payable is more than Rs.1 lac)

11. No penalty shall be imposed and no prosecution shall be sanctioned for late payment of taxes.

EXPLANATION – Delay period means the period between the due date and the time of payment.

12. New provisions for charitable trusts for re-registration etc approval  u/s 10(23)(C),

Registration u/s 12A/12AA and 80 G is expected to come into force from 01-04-2021 from the earlier extended date of 1-10-2020.

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Tax on Collection @ Sale on Goods – Extended wef.Oct’20

The Government of India has introduced a new Section 206C(1H) of the Income Tax Act, 1961 with regards to “Tax Collection at Source”. Applicable to all sellers of goods whose turnover for the preceding Financial Years exceeds Rs. 10 Crores rupees.

Example:-

If during FY 2019-20, turnover was exceeded ?10 Crores, then For FY 2020-21 w.e.f 01.10.2020, this provision will apply to such sellers.

Applicable from 01.10.2020

1. Every seller who has received any amount as sale consideration above Rs. 50 lakhs has to collect additional 0.075% of bill amount, collect PAN and pay as TCS every month.

section 206c

2. TCS returns have to be filed as like TDS returns are filed.

3. So everyone is advised to complete accounting for half year till 30.09.2020 and separate parties with whom sale of Rs. 50 lakhs is made.

4. From every sale after 01.10.2020 to such parties levy 0.075% TCS in every bill and keep record of the same

Accordingly, sellers will need to add 0.075% to the bill value and deposit with the government on receipt of the payment from buyers.

tax collection at source

Exceptions:- Seller is not required to Collect TCS on all the Types of sales under Section 206C(1H) provided:

  • If the Goods are exported out of India
  • If the goods are of such type on which TDS is liable to be deducted by the buyer (Like in the case of Job Work, Composite Supply).
  • If the seller is liable to collect the TCS under any other clause of Section 206C. (Like in the case of Motor Vehicle dealer he shall collect the TCS on the motor vehicles if the value of the vehicle exceeds Rs. 10 Lac)
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Implementation of Form 26AS of Income Tax

On 18July20, Income Tax Dept announced the implementation of the new 26AS form.

What is Form 26AS Form?

Till now Form 26AS, was a statement that the IT department used to provide u to capture

a)TDS deducted from U (example: Your company deducting TDS on your  salary)

(b) TCS: Tax collected at source (house property etc)

updated form 26as
Updates in New Form 26AS are:-

In News Form 26AS will contain new Section known as Section E. In this Section it will capture certain high-value transactions that you have made during the financial year. So at a glance, it’s going to help u see you large transations in a year.

For example transaticon which includes in this are:-

  • If you invest in a mutual fund of more than 10 lacs per year. This is a big transaction and it’s going to be captured in this statement
  • Fixed deposits in banks more than 10 lacs in a year
  • Credit Card Bills more than 10 lacs (in one year) if paid by check and more than 1 lacs if paid in cash
  • If you buy bonds more than 10 lacs in a year
  • If you buy shares more than 10 lacs in a year
  • If you buy Fx more than 10 lacs a year
  • If you buy MFs more than 10 lacs in a year
  • Purchase of Bank drafts more than 10 lacs in cash
  • If you deposit cash in savings bank account more than 10 lacs
  • Cash deposts or withdrawals from current account more than 10 lacs

This Section E will also be shown in your Form 26AS of pervious year also

form 26as
How will this Form 26AS will impact us?

This is potentially helpful to honest tax payers. Now we’ve got a single point source of all the major txns that will help us out. For those who evaded taxes-as IT departments already knew earlier-it now throws it in their face and says IT knows

So does thismean you should do transaction less than 10 lacs. For eg: Make a FD less than 10 lacs or split it to keep those below 10 lakh?

First thing, this is not a single value of transaction.y Anyhow, all your FDs (or other Txns as detailed above) will be cumulatively (in a single bank) looked at, So there’s no point trying to make smaller txns or splitting them.

Whether you need to worry of  IT departments if you spend too much on credit cards?

Again, honest tax payers need not worry of this. Yet if someone doesn’t pay taxes that claim negligible income yet spends more than 10 lacs, IT department is sure to ask him how much he can spend Or for example: if you say u have negligible income in your tax return and make FDs in Bank of more than 10 lacs or invest in MFs more than 10 lacs, be ready for Q on without income, how can u save so much

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