Income Tax Updates –Deciphering, News, Information, Notifications & Announcements

Deepti Shikha

24 May, 2024

The current FY 2019-2020 closed on March 31 as usual, and the new financial year 2020-21started from April 1, 2020. The Government on analysing the lockdown situation, which was declared to check the spread of coronavirus, had already extended the deadline for filing income tax returns for 2018-2019 as well as increased the date for linking PAN with Aadhar three months to June 30. New Income tax updates have been announced by the Government.

Here is a list of latest income tax updates and all the related notifications and announcements made by the Government:

Detailed Analysis of Income Tax Updates

In the ongoing COVID-19 circumstances and to provide immediate relief to the business entities and individuals, the Ministry of Finance announced that:

• It will release all the pending income-tax refunds up to Rs. 5 lakh immediately. According to the IT department, this move will benefit around 14 lakh taxpayers.
• It has also been decided to release all pending GST and Custom refunds, which would provide benefits to around 1 lakh business entities, including MSME. Thus, the total refund granted will be approximately Rs—18,000 crore.

The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020- Ordinance Dated 31^st March-Income tax update

 Due to the spread of the pandemic, the Government has relaxed specific provisions, including the extension of the time limit in the taxation and other laws. The following amendments are introduced through this ordinance:

• The last date of filing of the income tax return for the financial year has been extended from March 31, 2020, to June 30, 2020, for Assessment Year 2019-20  and fiscal year 2018-19. This extension applies to the filing of original return as well as amended returns.
• Assessee to claim capital gains exemption can make new investments in the new house property, bonds, and so on until June 30, 2020. Such investments or purchases made until June 30, 2020, can now be claimed as capital gains exemption for the financial year 2019-2020.
• Claiming of the deduction for SEZ units for the commencement of operation has been extended to June 30, 2020, for those units which had received approval by March 31, 2020.
• The time span for passing the income tax orders or issuing income tax notices to taxpayers has been extended from March 31 to June 30, 2020.
• The interest relating to delayed payment of taxes has been reduced to 9% per annum for any delayed payment of TCS, TDS, advance tax, equalization levy, Commodities Transaction tax (CTT) or Securities Transaction Tax (STT),  having due date from March 20 to June 29, 2020, but paid by June 30, 2020.
• The last date for Aadhaar PAN linking has been extended to June 30, 2020.
• Donations made to the PM CARES Fund will be eligible for 100% deduction as under section 80G. The donation made from April 1, 2020, to June 30, 2020, can be claimed as a tax deduction for the Financial Year 2019-20. In case a taxpayer wants to claim the tax deduction for FY 2020-21, the deduction is allowed both under the old regime and new optional tax regime.
• The time for declaration and payment to be made under the Vivad se Vishwas Scheme has been extended to June 30, 2020.

Central Board of Direct Taxes Notification on Section 115BAA

Section 115BAA was inserted in the Income Tax Act 1961, which provided for a reduced corporate tax rate of 22% from FY 2019-21 onwards for such domestic companies follow certain specified conditions. The income tax department has introduced Form no. 10-IC, which will be filed by the domestic companies as prescribed under section 115BAA to avail the benefit of lower taxes from Financial Year 2019-20 and onwards. This form will be submitted electronically and verified with the digital signature or EVC. Similarly, Section 115BAB was inserted to offering a reduced tax rate of 15% to the new domestic manufacturing companies. A new Form no. 10-ID was also introduced in this notification. The specific companies under section 115BAB need to file this form to avail of the lower tax rates from FY 2019-20 and onwards. This form will be electronically verified using a digital signature or an EVC.

Takeaway

Individuals should assess their compliance obligation and see if there is any compliance they can manage through the e-filing or online mechanisms or which can be complied within the extended timelines. In the meantime, when the Government is taking steps to relieve the burden for taxpayers, it is the liability of each taxpayer to fulfill their tax obligation in a timely manner on priority. In India now, almost all the tax compliances can be discharged online. Thus, the taxpayers should ensure to comply with all key tax compliances to avoid any issues or penal consequences at a later date. The Ministry of Finance to make the people aware releases many new income tax updates regularly.