As part of the covid-19 pandemic-related reduction actions, and thanks to the lockdown in the country, the government on 31 March promulgated an ordinance, calming certain provisions of revenue tax and other tax laws, and extending selected owing dates underneath these rules. This ordinance also furnished for the governing administration to notify any other dates. On 24 June, it notified additional extensions to specific owing dates. What are these concessions, how do they impact the popular taxpayer and do they actually present the necessary reduction?
There is no extension delivered for payment of advance tax, which is payable by 15 June, 15 September, 15 December and 15 March. However, if the advance tax payable by 15 June is paid by 30 June, interest would be payable at .75% for each thirty day period rather of 1.5%. Nonetheless, if you miss the due date of 15 June, it seems that the interest would still be payable for a period of time of 3 months, as typical, and not just for the 15 days delay.
Belated and revised cash flow tax returns (ITR) for the monetary yr 2018-19 can now be furnished till 31 July.
The thanks dates for filing ITR for all taxpayers for FY20 has been extended to 30 November. Having said that, if you are a salaried staff and want to file your return of profits early, you could nevertheless need to have to hold out awhile till your employer and financial institutions, wherever you keep fixed deposits, add their tax deducted at source (TDS) returns and the online Kind 26AS is updated. This might not happen until 15 August, because the due date for TDS returns, which was 31 May possibly, has also been extended to 31 July.
Further more, you are unable to unwind contemplating that the due date for filing your ITR is now a lot of months absent. Interest for delay in filing of ITR will nevertheless use at the standard rate of 1% per month in situation your self assessment tax liability (the differential tax you spend when you file your return) exceeds ₹1 lakh. You, for that reason, require to compute your believed balance tax liability, and if it exceeds ₹1 lakh, not just spend it, but also file your ITR by the typical due date. Else, you may have to suffer the additional liability of interest.
The government has permitted you to make tax-saving investments for FY20 until 31 July (this was before prolonged to 30 June). When you make these investments throughout the present-day calendar year right before 31 July, you will need to hold in mind that you can claim a deduction only once—either in FY20 or in FY21.
Even more, a dilemma you may well confront, if you are depositing ₹1.5 lakh in your General public Provident Fund (PPF) account before 31 July and boasting the deduction for FY20, is that there is also a greatest limit of ₹1.5 lakh for deposits in a PPF account throughout an FY. This restrict has not been peaceful or improved. As a result, you may possibly not be capable to deposit any much more sum throughout the latest FY, in order to be equipped to claim a deduction for this kind of deposit.
Nevertheless, there is no very similar trouble beneath the Nationwide Pension System (NPS), as there is no cap on deposits underneath it, but only a cap for deduction underneath the income tax law.
Time limits for filing appeals, replies or programs have also been extended, if the due date for filing these was between 20 March and 29 June (now extended to 31 December). Nonetheless, the useful experience has been that the Centralized Processing Centre (CPC) has been issuing notices for changes to returns even in the course of the lockdown, and has been passing orders creating these kinds of changes devoid of providing time to taxpayers until 30 June (now prolonged to 31 March 2021). This forces taxpayers to vacation resort to filing appeals or rectification applications—a waste of their time and energies. Certainly, CPC ought to be mindful of the change in legislation, and should act in accordance with it.
In case of reinvestment of capital gains to claim exemption, which needed to be reinvested between 20 March and 29 September, the investment has to be manufactured ahead of 30 September in order to claim the profit.
Whilst these relaxations ended up essential, taxpayers are still left with the sensation that these are just procedural timelines which have been prolonged, issue to challenging conditions, and no serious gain has been specified, even though other nations have completed so.
Gautam Nayak is a chartered accountant
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