Coronavirus Impact: India Relaxes Income Tax Deadlines And Penalties For Taxpayers
The government extended the last date for filing income tax returns for 2018-19 to June 30 from March 31, among other measures.
India offered several relaxations under the Income Tax Act and other direct tax laws to assuage taxpayers amid the coronavirus pandemic.
The government extended deadlines to file income tax returns and due dates under several direct tax statutes as well as reduced penalties, among others, Finance Minister Nirmala Sitharaman said during a press meet in New Delhi.
The announcements come as the novel virus outbreak infected more than 500 people in India and killed nine. That prompted the government to impose a lockdown and bar travel, shutting down businesses temporarily in the nation.
Here’s what Sitharaman announced:
Extends Income Tax Deadline & Lower Interest On Delayed Payment Of Taxes
The government extended the last date for filing income tax returns for the financial year 2018-19 to June 30 from March 31, Sitharaman said.
It also lowered the interest rate on delayed payment of advanced taxes, tax deducted at source, tax collected at source and equalisation levy, among others, to 9 percent from existing rates of either 12 percent or 18 percent, if the payments are made until June 30.
“The extension and decrease in rate of interest is a relief for many ordinarily resident taxpayers who need to file revised tax returns in order to claim foreign tax credit based on their overseas tax returns,” Alok Agrawal, partner at Deloitte India, said in an emailed statement.
Tax experts BloombergQuint spoke with also said the reduction in interest rate would assuage taxpayers from the impact of Covid-19 as it would help them preserve liquidity in the difficult economic condition.
In another move, the finance minister extended the date for linking Aadhaar with PAN card from March 31 to June 30.
Relaxation In ‘Vivaad Se Vishwas’ Scheme
The finance minister said no additional interest would be levied if payments under the tax dispute resolution mechanism were made till June 30. Prior to this, a taxpayer had to pay 10 percent interest if payments were deposited after March 31.
“The extension of the scheme with zero interest would be beneficial to those businesses that have past liabilities and have significant accumulated interest liabilities,” MS Mani, partner at Deloitte India, told BloombergQuint in an emailed statement.
Agreed Gouri Puri, partner at law firm Shardul Amarchand Mangaldas. Taxpayers who could not have opted for the scheme by March 31 in light of dwindling cash flows caused by Covid-19 related business disruptions, could now take its benefit, she said.
Extends Time Limits Under Direct Tax Statutes
The government extended due dates for compliance relating to events such as issue of notice, intimation to the tax department, filing of appeals and returns under different direct tax statutes.
The deadline for compliance under the Income Tax Act, Wealth Tax Act, Equalization Levy , Benami Property Transaction Act and other statutes has been extended till June 30 from March 20.
The finance ministry will issue circulars and make necessary amendments in order to implement the announcements, Sitharaman said.