Recent changes in Income Tax Act and compliance requirements that you need to know

We all are struggling to get back to our routine work and businesses, after the partial removal of the nationwide lockdown imposed to contain the spread of Covid pandemic, though a complete return to total normalcy is still quite far away.

In order to mitigate some part of our hardship, the Government had announced some relaxations in the Income Tax compliance requirements which include extension in the date for filing of income tax return (ITR) as well as linking PAN with Aadhaar.

Here are six recent changes made in the income tax and other compliance requirements:

  1. Extension of PAN-Aadhaar linking deadline

The deadline for linking PAN with Aadhaar has been extended again to March 31, 2021, the previous deadline being June 30, 2020. This extension in deadline gives some relief to those whose PAN and Aadhaar are not linked yet.

CBDT has clarified that PAN-Aadhaar linking deadline has been extended particularly in view of the fact that the Government has also extended the date for passing of order by the authorities and various compliances under various Direct Taxes and Benami Law from December 31, 2020 to March 31, 2021.

  1. Extension of the date for filing ITR

The Ministry of Finance earlier this week issued a notification mentioning that the last date for filing of original as well as revised ITR for AY 2019-20 (FY 2018-19) has been extended to July 31, 2020. The earlier time-barring last date for the same to be filed with late filing fees was Mar 31, 2020.

Along with this, the due date for filing ITR for the AY 2020-21 (FY 2019-20) has also been extended to November 30, 2020. The Government has also extended the date for furnishing tax audit report under section 44AB to October 31, 2020.

  1. Extension of Self-Assessment tax payment deadline

Due to the lockdown many small businesses and high net worth individuals are witnessing temporary cash crunch as their incomes have been impacted. In order to give relief to these people, the Government has extended the due date for payment of self-assessment tax for AY 2020-21 (FY 2019-20) to November 30, 2020.

Worth mentioning here is that this relaxation has been given only for those taxpayers whose self-assessment tax liability is up to INR 1 lakh. Thus, taxpayers whose self-assessment tax liability is more than INR 1 lakh will not get benefitted from this relaxation.

  1. Extension in date for making tax-saving investments

The Government has further extended the date for making various tax-saving investment under Chapter-VIA of the Income Tax Act, which includes section 80C investments like PPF, LIC, NSC etc., medical insurance premium under section 80D, and donations under section 80G.

With this relaxation, taxpayers will now be able to make investment for claiming deductions under the various sections for FY 2019-20 (AY 2020-21) by July 31, 2020.

  1. Extension in date for claiming deduction in respect of capital gains

Capital gains deduction for FY 2019-20 (AY 2020-21) can now be availed by investment in, construction or purchase of residential house made up to September 30, 2020.

The Government has extended the last date for making investment, construction or purchase for claiming deduction in respect of capital gains under sections 54 to 54GB of the Income Tax Act to September 30, 2020.

  1. Extension in dates for furnishing and issuance of TDS and TCS certificates

As you are aware, all tax deductors/collectors need to file the TDS/TCS returns and issue the TDS/TCS certificates to enable the deductees to claim the credit of the same while filing their ITR.

The date for furnishing of TDS/TCS statements and issuance of TDS/ TCS certificates pertaining to FY 2019-20 (AY 2020-21) has been extended to July 31, 2020 and August 15, 2020, respectively, giving employers and other deductors/collectors the much-needed relief.


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