With the Covid-19 crisis yet to abate, the Income Tax (I-T) department has extended several deadlines for taxpayers. With so many extensions and deadline changes, it's easy to lose track and this could pose challenges while filing I-T returns.
Archit Gupta, chief executive officer, Cleartax, says: “Estimation poses practical challenges. People may not be able to proceed with completion of tax-saving until July 31 due to the lockdown extension. Also, taxpayers do not have Form 16, TDS (tax deducted at source) or TCS (tax collected at source) certificates until August 15, 2020, to correctly calculate their self-assessment tax liability.”
The new changes include:
Tax filing for FY19
If you are someone who did not file returns until March 2020, you will now get additional time until July 31, 2020, to finish the same for the financial year (FY) 2018-19 (assessment year or AY 2019-2020). Also if you need to revise your income tax returns already filed, you can now do so by July 31, 2020.
Gupta says: “A return can be revised only if the original return was filed within the due date (August 31, 2019).” Earlier the due date was extended until June 30, 2020, and now the taxpayer has one month more.
Suresh Surana, founder, RSM India, says: “Though the due date for the return has been extended to July 31, 2020, the taxpayer would be subjected to the applicable
late fee for belated returns; interest under Section 234A/B/C shall also be applicable.
However, there shall be no late fee for revised returns, although interest liability under Section 234A/B/C may be revised due to change of income, if any.”
Self-assessment tax payment deadline
For FY20, small taxpayers will get relief as the I-T department won't charge interest under Section 234A, if the self-assessment tax liability of the taxpayer does not exceed Rs 1 lakh and the return is filed within the extended due date, that is, November 30, 2020.
Naveen Wadhwa, DGM, Taxmann explains: “Interest under Section 234A is charged if there is a shortfall in payment of self-assessment tax and return is filed after the expiry of the original due date.”
Tax filing for FY20
The earlier due date for filing income tax returns (ITR) for FY20 for a person whose accounts do not require auditing was August 31, 2020, and whose accounts require auditing, it was October 31, 2020. Now the extended due date for filing ITR for both categories of taxpayers is November 30, 2020.
Gopal Bohra, partner, NA Shah Associates, explains: “Accordingly, there will be no late filing fee if the ITR is furnished before this extended date of November 30, 2020.”
Investments for claiming tax deductions
The new deadline is July 31, 2020. Bohra says: “Therefore if a person makes donation/investment (LIC/PPF/School fee) before this deadline, he can claim the tax benefit for the same in the ITR of FY20. However, this will be subject to the maximum limit available under the I-T Act.”
Investment in a property for claiming deduction from capital gains: According to the provisions of Section 54 to 54G, the due date for investing/construction/ purchase for claiming rollover deduction with respect to capital gains under Section 54 to 54GB has been extended to September 30, 2020, which were originally due up to March 31, 2020.
Also, the last date of completing investment or construction of a house or investing in bonds or capital gains account scheme is September 30, 2020.
Gupta says: “This makes it difficult to estimate the tax liability as on July 31, 2020, and pay the self-assessment tax.”