Tax Penalties & Deadlines Removed by Govt Due to COVID-19

The government is coming up with ways to smoothen the difficulties faced by the population because of the spread of coronavirus in the country. Both economic and health-related measures are being taken to control the situation. The outbreak of COVID-19 has put the people under a lot of stress as firstly the situation is not getting any better, secondly, people are facing losses in their business reducing the liquidity in their hands. Moreover, with the end of the financial year 2019-20, tax liabilities are also summing up that will reduce the fund in the hands of the assessees even further.

Steps are being taken by the Government of India to work away for the solutions. On 24th March 2020, the finance minister, Smt Nirmala Sitharaman announced that the deadlines for filing IT returns Get all due dates of income tax return and payment of advance taxes for FY 2019-20 (AY 2020-21). We update the last date as per the IT department’s notifications. Read more and other related tasks of tax falling between 21st March 2020 and 29th June 2020 are being extended to 30th June 2020 for the convenience of the taxpayers. Additionally, the government has reduced or removed the penalties to be imposed in some cases. Other relaxations are also introduced. This post details all the relaxations being provided to the taxpayers by the government to soothe the problems being faced by them.

Last Date for Filing Belated Income Tax Return Extended

If an assessee fails to file the return for the year previous than the current previous year. The last date of filing a regular income tax return is 31st July of the assessment year but if the assessee fails to submit it by the date then he or she can file it by 31st March of the current financial year. Such returns are called belated returns.

The finance minister announced that the last date for filing belated returns for the assessment year 2019-20 is extended to 30th June 2020 instead of 31st March 2020. However, the penalties on such returns have not been revoked by the government. Penalties of Rs. 5,000 and Rs. 10,000 are imposed by the IT department if the income tax return is not filed until 1st January and 31st March, respectively but Rs. 1,000 is charged if the annual income of the assessee is below Rs. 5,00,000.

Last Date for Filing Revised ITR Extended

The Income Tax Department provides a facility for the taxpayers to revise the income tax return for last year. The last date of filing the revised IT return Know the step by step guide for revised income tax return filing of Assessment Year 2019-20 for taxpayers. Also, we attach screenshots for easy understanding. Read more is now shifted to 30th June 2020. The IT department will then verify the accuracy of the new return and send an intimation of the same.

Last Date for Investment in Tax Saving Schemes

It is advised by the IT department to invest in tax saving schemes, but most of the assessments leave it for the end of the financial year. Investing in some special schemes provides deduction under section 80C. The government has allowed the assessees to invest in such schemes till 30th June 2020 to get more deductions. Additionally, the deductions under section 80D and section 80CCD can also be availed till the same date.

Reinvestment in Capital Gains

The last date for reinvestment of the capital gains earned from 20th March 2020 to 29th June 2020 is now extended to 30th June 2020. Previously, the assessee was allowed to reinvest within 6 months of procurement of gains but now the gains that will be completing their six months during the period of 20th March 2020 to 29th June 2020 can now be invested till 30th June 2020. You will be receiving the deductions of such investments in the financial year 2020-21 or 2021-22. “There is no clarification as such from the tax department on this as of now. But maybe taxpayers will have to make a declaration on whether the investment is for FY20 or FY21,” said Shailesh Kumar, director, Nangia Andersen Consulting Pvt. Ltd, a chartered accountancy firm.

Low-Interest Rate on Self-Assessment Tax

You are required to estimate the tax liability for the belated returns. A penalty is charged by the department for the late returns, monthly. The interest rate on such returns is charged at the rate of 12% but now it is reduced to 9% by the government.

Low-Interest Rate on Advance Tax

All the assessees are required to pay an advance tax The complete guide to advance tax along with payment calculation, due dates and guidelines. We describe the advance tax payment calculation formula for easy learning. Read more if their annual income is more than Rs. 10,000. The salaried individuals are not required to do so as the employer deducts TDS. The last date for clearing the liability is 15th March, but a penalty at the rate of 12% is charged for delayed payments, which is now reduced to 9% by the government. “The date of the last installment of advance tax payment has not been extended, but the interest for delayed deposit of advance tax due on 15 March will now be computed at 9% instead of 12% for the period between 20 March to 30 June 2020,” said Sonu Iyer, national leader, People Advisory Services, EY India.

Aadhaar PAN linking

The last date for linking PAN with Aadhaar The Supreme Court on 4 February 2019 has recently issued the notice under which now the taxpayers would be asked to file the income tax returns with linking PAN. Read more is now extended to 30th June 2020, and if not done by then, the PAN will stand canceled. A penalty of Rs. 10,000 can be imposed on assessees having inoperative PAN.

Date of Settlement Under Vivad se Vishwas Extended

In Budget 2020, the finance minister, Mrs. Nirmala Sithraama had introduced a Vivad se Vishwas scheme Know about the tax dispute settlement scheme (Vivad se Vishwas Bill) under the IT act. Under this scheme, taxpayers can settle all disputes before the end of 31st March 2020 under which the assessee was given an opportunity to settle the amount of tax under cases filed in court, without any interest. The last date for making such settlements was 31st March 2020 which is now extended to 30th June 2020. “The deadline for settling tax disputes under the scheme has been extended to 30 June, and 10% additional charges which were supposed to be levied from 31 March have been removed up to 30 June 2020,” said Amit Maheshwari, partner, Ashok Maheshwary and Associates LLP, a chartered accountancy firm.

Last Date of Other Schemes also Extended

The last date for payment of taxes under Prohibition of Benami Property Transaction Act, Black Money Act, Equalization Levy law and many more arising between 20th March 2020 and 30th June 2020 is now extended to 30th June 2020. Deadlines for compliances under Companies Act 2013 are also extended till 30th June 2020.