Government Extends Timelines For Filing Income Tax Returns
The Income Tax Department head office in Mumbai. (Photograph: BloombergQuint)

Government Extends Timelines For Filing Income Tax Returns

The government has extended the timelines for filing of income tax returns by individuals as well as businesses in view of the Covid-19 pandemic.

Individual tax payers can now file their tax returns for financial year 2019-20 (assesment year 2020-21) till Jan. 10 compared to the earlier deadline of Dec. 31, the Income Tax Department said in a statement.

The government has also relaxed timelines for entities which are subject to transfer pricing provisions.

The revised timelines for filing income tax returns for FY 2019-20 are:

  • Taxpayers who are required to get their accounts audited under the Income Tax Act or businesses which are required to furnish reports on international or specified domestic transactions: Deadline has been pushed from Jan. 31 to Feb. 15, 2021.
  • Deadline for payment of self assessment tax by businesses in the above category has been extended to Feb. 15, if the self assessment tax liability is up to Rs 1 lakh.
  • Individual tax payers can file their tax returns as well as pay self assessment tax up to Jan. 10, 2021.
  • Deadline for filing tax audit report or report for international or specified domestic transactions has been extended till Jan. 15, 2021.
  • Last date for tax payers to make a declaration under the Vivad Se Vishwaas scheme has been extended till Jan. 31.

Taxpayers must, however, pay interest for delayed filing of tax return or shortfall in the tax amount.

Shailesh Kumar, partner at Nangia & Co. LLP, said taxpayers waiting to file during the extended timelines will need to pay additional interest for one more month, except for small taxpayers having self assessment tax liability up to Rs 1 lakh.

Interest under two provisions of the Income Tax Act will be attracted for a taxpayer who is required to pay self assessment tax and if he makes a delay, Kumar explained. Interest under section 234A applies for delay in filing income tax return beyond original due date. Interest under section 234B will apply for any shortfall in discharging tax liability by March 31, he said.

Calculation of interest under section 234A starts after original due date of filing the ITR and stops on date of filing ITR, while calculation of interest under section 234B starts on April 1 of a relevant assessment and ends on date of payment of full tax liability as self assessment tax.
Shailesh Kumar, partner, Nangia & Co LLP

This comes after India initially extended deadlines in March for filing of income tax returns, compliance due dates under various tax laws and reduced penalties in light of the Covid-19 outbreak.

Tax experts pointed out that taxpayers must complete their tax filings immediately irrespective of the extension.

The suspense around extension of due dates for filing ITRs gives a marginal relief to taxpayers who are still struggling to comply with the timeline, Kumar said.

Paras Savla, partner at KPB Associates said that the tax department seems to have lost sight of the extended lockdown and absence of public transport in many metropolitan cities of India as it has relaxed the due dates for filing return of income and audit reports by only a few days. Taxpayers must gear up to file returns within the short extended deadline, he said.

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