COVID-19: Relaxations introduced by Government relating to the Income Tax

The spread of COVID-19 is increasing daily severely affecting the economy and lives of the people worldwide. The Government of India is working on relief measures and benefit packages to overcome the impact of the COVID-19 on the economy. Some of the regulatory relaxations introduced by Government relating to both Direct and Indirect taxation are stated as below:

1. Deadline extended for income-tax filing:

Timeline for filing delayed and revised tax returns for FY 2018-19 (i.e. AY 2019-20) has been extended from 31 March 2020 to 30 June 2020. It is to be noted that there is no waiver in terms of late fee of INR 10,000 for filing the delayed return,

2. Linking Aadhaar Card with Permanent Account Number (PAN):

The timeline for linking the Aadhaar card with PAN by the taxpayers has been extended upto 30th June, 2020.

3. Deductions u/s 80C, 80D, 80G, etc.

Deductions under 80C, 80D, 80G, etc. for the Investment and payment made can be claimed up to 30th June, 2020.

– Investment in PPF/LIC eligible for deduction u/s 80C and mediclaim payment for claiming deduction u/s 80D can be done till 30.06.2020.

– If a person fails to deposit any amount in the PPF account till March 31, 2020 and if he deposits between April to June 2020 then surely, he will be eligible for deduction u/s 80C in the FY 2019-20.

– Payment of Premium of old policies of LIC, mediclaim, PPF, NPS, etc. due upto 31stMarch can be claimed as deduction even if paid till 30thJune. Note that only the payment of such policies which has become due before 31st March would be considered for deduction.

– Contributions to the PM Cares Fund u/s 80G is eligible for 100% deduction. All contributions made between April 1, 2020 and June 30, 2020 will be eligible for deduction for only one FY under section 80G, as already specified under section 80G(5A).

4. Dispute resolution schemes

Government has also extended the deadline for dispute resolution schemes on the direct tax (Vivaad se Vishwas Scheme) and indirect taxes (Sabka Vishwas Scheme) till 30thJune,  2020.

5. Timeline for capital gain exemptions

Investments, deposits, acquisition, purchase, construction or any similar action, which are required to be made for the purpose of claiming exemption from Sections 54G to 54 GB can now be made up to June 30, 2020.

6. The timeline for various compliances falling between 20 March 2020 and 29 June 2020 has been extended to 30 June 2020

– Issuance of notices falling within the above period,
– Time limit for filing appeals either by the taxpayers or revenue authorities before any appellate forum;
– Issuance/processing of intimations under section 143(1)/ 200A of the Income Tax Statute;
– Issuance of orders for completion of any proceedings under Direct Tax Laws;
– Furnishing returns/statements (such as WHT), SFT, challan cum statement for WHT on sale/rental of immovable property etc.);
– Issuance of WHT Certificates;
– Filing of Country by Country Report for FY 2018-19;
– Submission of statement (in Form No. 49C) by non-resident having a liaison office in India;
– Investments by individual taxpayers for claiming deductions in their tax returns;
– Filing of applications by the taxpayers under various provisions of the statute (such as revision applications/interest or penalty waiver applications) etc.

The above measures are applicable mutatis mutandis to the applicable provisions under Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law, Equalization Levy law, Vivad Se Vishwas law;

7. The first cut-off date for payment of taxes without any additional interest cost has been extended from 31 March to 30 June 2020.

8. TDS/ TCS related compliance: The timeline for compliance of TDS/TCS filing for the period January 2020 to May 2020 has been extended up to 30th June, 2020.