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As part of the covid-19 pandemic-related relief measures, and due to the lockdown in the country, the government on 31 March promulgated an ordinance, relaxing certain provisions of income tax and other tax laws, and extending certain due dates under these laws. This ordinance also provided for the government to notify any other dates. On 24 June, it notified further extensions to certain due dates. What are these concessions, how do they affect the common taxpayer and do they really provide the needed relief?
There is no extension provided for payment of advance tax, which is payable by 15 June, 15 September, 15 December and 15 March. However, if the advance tax payable by 15 June is paid by 30 June, interest would be payable at 0.75% per month instead of 1.5%. However, if you miss the due date of 15 June, it appears that the interest would still be payable for a period of three months, as usual, and not just for the 15 days delay.
Belated and revised income tax returns (ITR) for the financial year 2018-19 can now be furnished till 31 July.
Further, you cannot relax thinking that the due date for filing your ITR is now many months away. Interest for delay in filing of ITR will still apply at the normal rate of 1% per month in case your self assessment tax liability (the differential tax you pay when you file your return) exceeds ₹1 lakh. You, therefore, need to compute your estimated balance tax liability, and if it exceeds ₹1 lakh, not just pay it, but also file your ITR by the normal due date. Else, you may have to suffer the additional liability of interest.
Further, a problem you may face, if you are depositing ₹1.5 lakh in your Public Provident Fund (PPF) account before 31 July and claiming the deduction for FY20, is that there is also a maximum limit of ₹1.5 lakh for deposits in a PPF account during an FY. This limit has not been relaxed or increased. Therefore, you may not be able to deposit any more amount during the current FY, in order to be able to claim a deduction for such deposit.
Time limits for filing appeals, replies or applications have also been extended, if the due date for filing these was between 20 March and 29 June (now extended to 31 December). However, the practical experience has been that the Centralized Processing Centre (CPC) has been issuing notices for adjustments to returns even during the lockdown, and has been passing orders making such adjustments without giving time to taxpayers till 30 June (now extended to 31 March 2021). This forces taxpayers to resort to filing appeals or rectification applications—a waste of their time and energies. Surely, CPC must be aware of the change in law, and must act in accordance with it.
While these relaxations were necessary, taxpayers are left with the feeling that these are merely procedural timelines which have been extended, subject to complicated conditions, and no real benefit has been given, though other countries have done so.
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