Almost all of these were meant to provide relief to the taxpayers during the COVID period. Image: Reuters
Tax-Related Changes of 2020: The year 2020 witnessed major changes. This year will be remembered due to the coronavirus epidemic. This epidemic has been the reason for most of the changes that have taken place in the past year in India. Due to COVID 19, many changes were also seen in the country on the tax front. Almost all of these were meant to provide relief to the taxpayers during the COVID period. Some new initiatives for taxpayers were also announced. Let’s take a look at some of these…
In Budget 2020, the government announced the ‘Vivad se Vishwas‘ scheme. The purpose of this resolution scheme is to resolve the pending tax disputes in the country. Under this scheme, taxpayers will have to pay only the disputed tax amount. They will get a full rebate on interest and penalty. Taxpayers can take immediate advantage of this scheme and resolve disputes immediately. They will get relief from fines, interest and litigation. Currently, due to the COVID 19 pandemic, the deadline for payment under the trust scheme has been extended to 31 March 2021. At the same time, the passing date of orders under the scheme has been increased to 31 January 2021.
Optional tax slab
The alternative income tax slabs were announced in the Budget 2020 presented in February. Now both the old traditional income tax slab and the new alternative tax slab are available to taxpayers. The optional tax slab is as follows-
After the announcement in Budget 2020, the facility of Instant PAN Card for citizens came into force. Now online instant pan can be found sitting at home. In Instant PAN, you have a soft copy of PAN card ie e-PAN comes within 10 minutes of applying. This is as valid as physical PAN card. Instant PAN facility is available for those applicants who have a valid Aadhaar number and their mobile number is registered with Aadhaar. Electronic PAN (e-PAN) is issued without any charge. Read to know the process details.
Additional tax benefit on home loan for one more year
In the budget 2019, the government made a provision for an additional deduction of up to Rs 1.5 lakh on the interest payment of the home loan. However, only those people who took loan between April 2019 and March 2020 could take advantage of it. In the budget 2020, this deadline was extended for one year. There is a tax deduction of up to 2 lakh rupees under Section 24 on the interest payment of the home loan. At the same time, a deduction up to Rs 1.5 lakh is available under section 80C on the principal amount.
Dividend taxable from mutual fund
DDT has been abolished on the dividend paid by companies and mutual funds in the budget 2020. Now the dividend received from mutual funds and domestic companies will be taxable to the recipient.
Limited contribution of employer in PF tax-free
If the employer’s contribution to the NPS, EPF and pension fund crosses Rs 7.5 lakh in a year, it will be taxable at the employee’s end. This change in the income tax rules will be applicable in both new and old tax slabs.
Increase in the deadline of tax saving investment
In the financial year 2019-20, the central government extended the time till 31 July 2020 by extending the time limit for tax saving investments. That is, the deduction could be claimed for the tax-saving investments made till this date for the financial year 2019-20.
ITR filing deadline moving forward
The government has already extended the date of filing of income tax returns for the financial year 2019-20 three times. In the case of individual taxpayers, the last date for filing ITR was first increased from 31 July to 30 November 2020. Then it was increased to 31 December 2020. Now in the new order, the government has again increased this deadline to 10 January 2021. The deadline for filing returns for such individual income taxpayers who need to get their accounts audited is now February 15. The last date for filing returns for companies has been January 15, 2021.
Deadline of late income tax increases
The Central Board of Direct Taxes (CBDT) has extended the last date for submission of delayed and revised ITR for the financial year 2018-19 (AY 2019-20) to 30 November 2020. The deadline was also increased before this. The actual last date for filing the ITR for the financial year 2018-19 was 31 March 2020, which was first extended to 30 June 2020 and then 31 July 2020. After this, once again it was carried forward to 30 September and then 30 November 2020. Apart from this, the interest rate on ITR’s late payment has been reduced from 12 per cent to 9 per cent for the financial year 2018-19.
25% less TDS, TCS for these special payments
In May, the government decided to reduce the TDS (Tax Deducted at source) for non-salaried payments and TCS (Tax Collected at Source) rate for specified receipts by 25 per cent for the remaining current financial year. Save more money in the hands of the taxpayers, so the TDS for non-salaried specified payment to residents and TCS for specified receipts was reduced by 25% from the current rate till 31 March 2021.
Relief in case of Form 15G / 15H
CBDT provided relief to investors due to the ban on the exit of people in lockdown. CBDT has decided that Forms 15G / 15H submitted in the financial year 2019-20 will be valid till 30 June 2020 and banks / financial institutions will not deduct tax on the interest income of the investors till the end of June.
New facility to bank/post offices to catch tax evasion
CBDT made a new facility available to banks and post offices this year. With this help, the appropriate rates of TDS applicable on cash withdrawals of more than Rs 20 lakh in the case of non-filers (non-filers) and more than Rs 1 crore in the case of those filing income tax returns can be ascertained. This new feature became available on https://incometaxindiaefiling.gov.in as “Verification of applicability u / s 194N” from 1 July 2020.
Declaration of Transparent Taxation Program
In August, Prime Minister Narendra Modi launched the Transparent Taxation Program (Transparent Taxation System – Honoring the Honorable) for honest taxpayers. Under this, the Faceless Assessment, Faceless Appeal and Taxpayers Charter were brought. The Faceless Assessment and Taxpayers Charter came into force immediately, while the Faceless Appeal came into force from 25 September.
ITR verification from AY 2015-16 to 2019-20
The taxpayers who did not verify the e-filed tax returns from the assessment year 2015-16 to 2019-20, were given a one-time exemption i.e. one-time relaxation in the month of July by the Income Tax Department. Such taxpayers were given the opportunity to complete the process of verification of their returns by 30 September 2020.
New rule on TCS collection by the seller
The Central Board of Direct Taxes (CBDT) implemented a new rule this year that any vendor can deduct tax at source (TCS) only if his business has exceeded Rs 10 crore in the previous financial year. The Finance Bill 2020 amended the provisions relating to TCS, which came into force from October 1, 2020. The seller of goods will collect tax at the rate of 0.1 per cent (0.075 per cent by 31 March 2021) if the receipt of the sale from a buyer exceeds Rs 50 lakh in the financial year. This TCS will be applicable only on the amount received on or after 1 October 2020 this year.
TCS on Overseas Remittance
It was proposed to amend section 206C of the Income Tax Act to recover TCS on the sale of Overseas Remittance and Overseas Tour Packages. According to the new rules under section 206C, TCS will be payable at the rate of 5 per cent if a person sends an amount of Rs 7 lakh or more as remittance under LRS outside India in a financial year. If the PAN or Aadhaar is not provided to the Authorized Dealer or Tour Package vendor, the TCS rate will be 10%. However, the refund can be found by filing the income tax return.