1. Due Date for Taxpayers (having Tax Audit) – Extended to 31st Jan, 2021 2. Due Date for Taxpayers (Not having Tax Audit) – Extended to 31st Dec, 2020 3. Due Date For Taxpayers (Under TP) – Extended to 31st Jan, 2021 4. Due Date of Deposit Self Assessment Tax (Only if up to Rs. 1 lakh) – Extended to 31st Jan,2021 5. Due Date of Furnishing Audit Report by CA – Extended to 31st Dec, 2020
The income tax return (ITR) filing deadline for FY 2019-20 has been extended to December 31, 2020, for most individual taxpayers, from the earlier deadline of November 30, 2020. This the second time the tax filing deadline for FY20 has been extended.
As per the government’s press release issued on October 24, 2020, “In order to provide more time to taxpayers for furnishing of their ITR, it has been decided to further extend the due date for furnishing of Income-Tax Returns as under:
The due date for furnishing of income tax returns for these individual taxpayers [for whom the due date (i.e. before the extension by the said notification dated June 24, 2020 as per the Act was 31st July, 2020] has been extended to 31st December, 2020.
The due date for furnishing of Income Tax Returns for the taxpayers (including their partners) who are required to get their accounts audited [for whom the due date (i.e. before the extension by the said notification dated June 24, 2020) as per the Act is 31st October, 2020] has been extended to 31st January, 2021.
The due date for furnishing of Income Tax Returns for the taxpayers who are required to furnish report in respect of international/specified domestic transactions [for whom the due date (i.e. before the extension by the said notification dated June 24, 2020) as per the Act is 30th November, 2020] has been extended to 31st January, 2021.
Consequently, the date for furnishing of various audit reports under the Act including tax audit report and report in respect of international/specified domestic transaction has also been extended to 31st December, 2020, said the government press release issued today.
Further, relief is provided to the small and middle class taxpayers in the matter of payment of self-assessment tax, the due date for payment of self-assessment tax date is hereby again being extended. Accordingly, the due date for payment of self-assessment tax for taxpayers whose self-assessment tax liability is up to Rs. 1 lakh has been extended to 31st January, 2021 for the taxpayers whose accounts are required to be audited and to 31st December, 2020 for the taxpayers whose accounts are not required to be audited.”
The Income Tax department on Friday said it has issued refunds worth Rs 88,652 crore to over 24 lakh taxpayers so far this fiscal.
This include personal income tax (PIT) refunds amounting to Rs 28,180 crore issued to over 23.05 lakh taxpayers and corporate tax refunds amounting to Rs 60,472 crore to over 1.58 lakh taxpayers during this period.
“CBDT has, so far, issued refunds of over Rs 88,652 crore to more than 24.64 lakh taxpayers from 1st April, 2020 onwards.
Income tax refunds of Rs 28,180 crore have been issued in 23,05,726 cases & corporate tax refunds of Rs 60,472 crore have been issued in 1,58,280 cases,” the Income Tax department tweeted.
The Central Board of Direct Taxes (CBDT) is the apex decision-making body in direct tax matters, administers personal income tax and corporate tax.
The government has emphasized on providing tax related services to taxpayers without any hassles during COVID-19 pandemic and to that end has been clearing up pending tax refunds.
Prime Minister Narendra Modi announced several tax measures on the eve of India’s Independence Day last week honouring the honest tax-paying citizen.
You will now have to file your income-tax (IT) return or pay higher percentage of tax deduction at source if you make certain spends in a year.
If you spend Rs 20,000 a year as hotel expenses, property tax or even a health insurance premium, then your transactions would be reported. Similarly, if your annual rent exceeds Rs 40,000, life insurance premium is at least Rs 50,000 or electricity bills of Rs 1 lakh or more during a financial year, then you would be answerable to the taxman either via notices or through mandatory filing of returns.
The motive of the move is to check whether your spending is in line with the income you actually disclose in your return.
The Government has been shunting all doors to not only reduce the number of all cash transactions, but also increase the number of returns filed. The new move to collect spending data is another tool in the armoury to curb tax evasion.
Are transactions tracked currently?
The existing income tax rules mandate financial institutions such as banks, mutual fund houses, share registrar and transfer agents,sub-registrars to report high value transactions exceeding a specified limit during a financial year to the Income Tax Department.
So, a bank has to report details of every account holder who makes cash deposits of more than Rs 10 lakh in a year in a savings account or makes a payment of more than Rs 2 lakh from his credit card in a year. Similarly, asset management companies are required to report details of all the investors who invest more than Rs 2 lakh in a single mutual fund scheme. Now not only your investments and financial transactions, but also your specific spends will be tracked.
Do I have to inform the government of all my spends?
No. You do not have to go out of your way to inform the government or anyone, unless asked for in the tax return forms. Your purchases and expenses beyond a threshold will be mentioned in the returns of the hotel, electronic goods seller, artist, school, ceramic supplier or the Registrar in the case of property purchase, apart from banks, mutual fund houses, life and general insurance companies.
The details mapped to you would be reflected in your individual tax statement or Form 26AS. This form would be available on your income-tax website login.
The moment your spends in any of the high-spend categories mentioned, exceed the respective threshold limits, your Form 26AS would capture it. In other words, you have to file your tax returns.
Non-filing of ITR may have severe consequences for a person, who is otherwise required to file an ITR. Apart from attracting interest, late fee and penalty, wilful non-filing of ITR may also attract criminal prosecution.
The new move has been part of the government’s move to widen the tax net and get more and more people to file their income tax returns. A total of about 55 lakh or 80 per cent of the total returns are filed by people having an income of up to Rs 5 lakh, as per the Central Board of Direct Tax’s numbers as of July 31, 2020.
Only 5,066 individuals, who have an income above Rs 1 crore file returns, accounting for 0.73 per cent of the total individual tax returns.
Taxpayers would not need to mention their high-value transactions in their income tax returns, said officials in the know of the matter, but added that broadening the scope of reporting financial transactions by third parties had become vital since taxation was moving towards a faceless approach.
It’s clarified that only third parties would report high-value transactions to the income tax department as per the Income Tax Act. The information would be used to identify people who are not paying up due taxes, and not for examining affairs of honest taxpayers.
“The information will be used to identify those who are either not filing the returns or the income disclosed in the returns are not proportionate to the pattern of expenditure reported in the statement of financial transactions (SFTs),” the official said.
Data analytics and artificial intelligence will be used for this, instead of manual intervention.
Terming the method as most ‘non-intrusive’, the official said it would be used for identifying those who spend big money on business class air travel, foreign travel and expensive hotels or send their children to expensive schools, but do not pay taxes, claiming their income to be under Rs 2.5 lakh a year.
Prime Minister Narendra Modi flagged this very issue on Thursday, and asked people to pay their fair share of taxes, given that the country’s tax base was relatively small.
“Only 1.5 crore people pay taxes in a country of 130 crores,” he pointed out while launching a taxpayer’s charter and faceless assessment, aimed at improving transparency in tax administration.
“No doubt, the third-party reporting of high-value transactions made by such non-filers would allow the department to nudge such persons to file their returns and pay their due tax,” the official said.
Faceless e-assessment will have no human interface and it’s purpose will be to eliminate instances of “undesirable practices” on the part of tax officials.
The Central Board of Direct Taxes (CBDT) on Thursday revised the ‘E-assessment Scheme, 2019’ notified on September 12, 2019. The Government notified that now, the e-Assessment scheme shall be called Faceless Assessment.
Now, the National e-Assessment Centre shall intimate the assessee for the conduct of faceless assessment in case wherein notice has been issued by AO.
The Board has also extended its scope to cover best judgment assessments.
E-Assessment was a roadway towards a paperless, faceless assessment stripping away at bureaucratic layers. E-Assessment was earlier tried and tested by the Income-tax Department, before going forth with the E-Assessment Scheme, 2019.
The Board notified that in the notification dated September 12, 2019, in the opening portion, for the word “E-assessment”, the words “Faceless Assessment” shall be substituted. The Board notified the procedure for the faceless assessment wherein the National e-Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143, specifying the issues for selection of his case for assessment.
Promoting a transparent and fair tax regime, Prime Minister Narendra Modi unveiled ‘taxpayers’ charter’, enshrining rights of assesses in a statute under the Income tax law. With the launch of ‘Transparent Taxation — Honoring the Honest’ platform, Modi also unveiled faceless appeal and expanded the scope of faceless assessment, eliminating physical interface between taxpayers and tax authority.
Step wise process for Faceless Assessment, scope extended to cover best judgement assessment:
Introduction
The Central Board of Direct Taxes (CBDT) has revised the ‘E-assessment Scheme, 2019’ notified on September 12, 2019. Now, e-assessment scheme shall be called Faceless Assessment.
The National e-Assessment Centre shall intimate the assessee for conduct of faceless assessment in case wherein notice has been issued by AO. The Board has also extended its scope to cover best judgment assessments.
What was the E-assessment Scheme, 2019?
Finance Minister Nirmala Sitharaman had announced the e-assessment scheme in her Budget speech on July 5, 2019, which was subsequently inaugurated on October 7, 2019.
This was aimed at moving to faceless scrutiny and elimination of human interface in assessment proceedings. The scheme was set to bring in a “paradigm shift” in taxation by eliminating human interface in the income tax assessment system.
The Ministry of Finance vide Central Board of Direct Taxes (CBDT) notification No 61 & 62 dated 12th September 2019 has respectively notified the E- assessment Scheme 2019 & gave directions for its implementation.
E-assessment Scheme, 2019 to be now called as “Faceless Assessment”
Step wise process for Faceless Assessment
By the Notification issued by CBDT on 13th August, 2020, “E-assessment” will be now called as “Faceless Assessment”. Faceless assessment shall be made as per the following procedure:-
Step 1 – Issue of Notice on Assessee
National e-Assessment Centre shall serve a notice on the assessee under section 143(2), specifying the issues for selection of his case for assessment
Assessee may, within 15 days from the date of receipt of notice, file his response to the National e-assessment Centre
Step 2 – Case to be assigned to Assessment Unit
1.National e-assessment Centre shall assign the case selected for the purposes of e-assessment to a specific assessment unit in any one Regional e-assessment Centre through an automated allocation system
2. Where a case is assigned to the assessment unit, it may make a request to the National e-assessment Centre for:-
a. obtaining such further information, documents or evidence from the assesse or any other person
b. conducting of certain enquiry or verification by verification unit
c. seeking technical assistance from the technical unit
3. Where a request for obtaining further information, documents or evidence from the assessee or any other person has been made, the National e-assessment Centre shall issue appropriate notice or requisition to the assessee or any other person for obtaining the information, documents or evidence requisitioned by the assessment unit
4. Where a request for conducting of certain enquiry or verification by the verification unit has been made, the request shall be assigned by the National e-assessment Centre to a verification unit through an automated allocation system
5. Where a request for seeking technical assistance from the technical unit has been made, the request shall be assigned by the National e-assessment Centre to a technical unit in any one Regional e-assessment Centre through an automated allocation system
6. The assessment unit shall, after taking into account all the relevant material available on the record, make in writing, a draft assessment order either accepting the returned income of the assessee or modifying the returned income of the assessee, and send a copy of such order to the National e-assessment Centre with details of the penalty proceedings to be initiated therein, if any.
Step 3 – Draft Assessment Order
1.National e-assessment Centre shall examine the draft assessment order in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to:-
a. finalise the assessment as per the draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if any, to the assessee, alongwith the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment, or
b. provide an opportunity to the assessee, in case a modification is proposed, by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the draft assessment order, or
c. assign the draft assessment order to a review unit in any one Regional e-assessment Centre, through an automated allocation system, for conducting review of such order;
2. Review unit shall conduct review of the draft assessment order, referred to it by the National e-assessment Centre whereupon it may decide to:-
a. agree with the draft assessment order and intimate the National e-assessment Centre about such agreement; or
b. suggest such modification, as it may deem fit, to the draft assessment order and send its suggestions to the National e-assessment Centre;
3. National e-assessment Centre shall, upon receiving concurrence of the review unit, follow the procedure laid down in sub point (a) or (b) of point (1), as the case may be
4. National e-assessment Centre shall, upon receiving modification suggestions from the review unit, communicate the same to the Assessment unit
5. Assessment unit shall, after considering the modifications suggested by the Review unit, send the final draft assessment order to the National e-assessment Centre
6. The National e-assessment Centre shall, upon receiving final draft assessment order, follow the procedure laid down in sub point (a) or (b) of point (1),as the case may be
7. The assessee may, in a case where show-cause notice has been served upon him, furnish his response to the National e-assessment Centre on or before the date and time specified in the notice
8. The National e-assessment Centre shall,-
a. in a case where no response to the show-cause notice is received, finalise the assessment as per the draft assessment order; or
b. in any other case, send the response received from the assessee to the assessment unit;
9. The assessment unit shall, after taking into account the response furnished by the assessee, make a revised draft assessment order and send it to the National e-assessment Centre
Step 4 – Final Order and Completion of Assessment
The National e-assessment Centre shall, upon receiving the revised draft assessment order:-
a. in case no modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order, finalise the assessment or
b. in case a modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order, provide an opportunity to the assessee
c. the response furnished by the assessee shall be dealt with as per the procedure laid down in point 7, 8, 9 of Step 3
2. The National e-assessment Centre shall, after completion of assessment, transfer all the electronic records of the case to the Assessing Officer having jurisdiction over such case for:
a. imposition of penalty
b. collection and recovery of demand
c. rectification of mistake;
d. giving effect to appellate orders
e. submission of remand report, or any other report to be furnished, or any representation to be made, or any record to be produced before the Commissioner (Appeals), Appellate Tribunal or Courts, as the case may be
f. proposal seeking sanction for launch of prosecution and filing of complaint before the Court;
3. National e-assessment Centre may at any stage of the assessment, if considered necessary, transfer the case to the Assessing Officer having jurisdiction over such case.
Faceless assessment facility was extended to the entire country on 13th August, 2020, ending territorial jurisdiction and individual discretion, where an officer was the whole and sole to the assessee. Scrutiny will be allotted on a random basis. Assessment of a taxpayer in Delhi could well be carried by an officer sitting in Pune. It will put an end to needless litigation. Best Judgements Assessments under Section 144 will be also now covered under Faceless Assessment.
What is the meaning of Best Judgement Assessment?
The Best Judgment Assessment is a procedure under the Income Tax Act to comply with the principles of natural justice. Vide Section 144 of the Income Tax Act, 1961 the Assessing Officer is under an obligation to make an assessment of the total income or less to the best of his judgment in the following cases:
If the person fails to file a return required under section 139(1) and he has not filed a revised return.
If any person fails to comply with all the terms and conditions stipulated under a notice under section 142 or fails to comply with the directions requiring him to get his accounts audited in terms of section 142(2A).
If any person, after having filed a return fails to comply with all the terms of a notice under section 143(2) requiring his presence or production of evidence and documents; or
If the Assessing officer is not satisfied about the correctness and the completion of the accounts of the assessee if no method of accounting has been regularly employed by the assessee.
While Faceless Assessment and Taxpayers Charter came in force already, Faceless Appeal will be available from September 25, 2020. Under the Faceless Appeals system introduced by the government, appeals will be randomly allotted to any officer across the country and the identity of the officer deciding the appeal will remain unknown. The decisions will be team-based.
Very Important update for Charitable Trusts and Exempt Institution registered under section 80G, 12A or section 12AA : New – Fresh Registration Required : Last Date 31.12.2020
All Charitable trusts and exempt institution which are already registered under section 80G, 12A or section 12AA of Income Tax Act, 1961 will now be required to obtain FRESH REGISTRATION by December 31, 2020.
Provisions of registration under section 80G, 12AA or section 12A will be redundant from 31st December, 2020 and a new section 12AB will come into force with effect from 01st January 2021.
All the existing registered trusts under the erstwhile section 80G, 12A or section 12AA would move to new provision section 12AB.
The new section 12AB proposes to change the registration process by prescribing the time frame for processing the application and validity of such a registration certificate so granted under the new section 12AB.
An order granting registration or approval shall be passed within 3 months of the application. Such registration or approval shall be valid for 5 years.
Similarly, charitable trusts and exempt institutions which already have Section 80G certificate will now be required to reapply for registration or approval by December 31, 2020.
The Central Board of Direct Taxes (CBDT) on Wednesday (July 29) extended the deadline for filing income tax returns for 2018-19 fiscal till September 30 due to corona virus COVID-19 pandemic.
The Central Board of Direct Taxes (CBDT) on Wednesday (July 29) extended the deadline for filing income tax returns for 2018-19 fiscal till September 30 due to coronavirus COVID-19 pandemic.
“In view of the constraints due to the Covid pandemic & to further ease compliances for taxpayers, CBDT extends the due date for filing of Income Tax Returns for FY 2018-19 (AY 2019-20) from 31st July, 2020 to 30th September, 2020,” the Income Tax Department said in a tweet.
It is to be noted that this is the third extension given by the Centre to taxpayers to file both original and revised tax returns for 2018-19 fiscal.
In March, the Centre had extended the due date from March 31 to June 30 due to corona virus COVID-19 pandemic. Later in June, the date was again extended by a month till July 31.
If an individual fails to file the belated ITR, if due, by the deadline (i.e., September 30, 2020), then he/she will not be able to file the income tax return for the financial year 2018-19.
The CBDT has said that an individual can also file a revised ITR for FY2018-19 within this deadline.
The Income Tax department’s data analysis has identified certain taxpayers with high value transactions who have not filed ITR for AY 2019-20 (i.e. FY 2018-19). In addition to the non-filers, another set of return filers have also been identified wherein the high-value transactions do not appear to be in line with their Income Tax Return.
The Board said that the objective of the e-campaign is to facilitate taxpayers to validate their financial transaction information against information available with the IT department and promote voluntary compliance, especially for the assesses for the FY 2018-19 so that they do not need to get into notice and scrutiny process.
Under this e-campaign the Income Tax Department will send email/sms to identified taxpayers to verify their financial transactions related information received by the I-T department from various sources such as Statement of Financial Transactions (SFT), Tax Deduction at Source (TDS), Tax Collection at Source TCS), Foreign Remittances (Form 15CC) etc,” CBDT said.
It added that the department has collected information related to GST, exports, imports and transactions in securities, derivatives, commodities and mutual funds under information triangulation set up.
The campaign is scheduled for 11 days starting from July 20, 2020 and ending on July 31, 2020.
With the new e-campaign, the taxpayers will be able to access details of their high value transactions on the designated portal. They will also be able to submit online response by selecting among any of these options:
(i) Information is correct,
(ii) Information is not fully correct,
(iii) Information related to other person/year,
(iv) Information is duplicate/included in other displayed information, and
(v) Information is denied.
Also, department has clarified that there would be no need to visit any Income Tax office, as the response has to be submitted online.
This is a dual way move of the department, on one hand this will get more assessees under scrutiny and thus help in identifying defaulters. While on the other hand this will increase the speed of process and avoid unnecessary mental harassment of the assessees.
It may be noted that the last date for filing as well as revising the Income Tax Return for Assessment Year 2019-20 (relevant to FY 2018-19) is 31st July 2020.
