Finance Ministry Extends Deadline Of IT Act Compliances; COVID Treatment Expenditure & COVID Death Ex-Gratia Exempted From Tax

The Government has granted an extension of timelines of compliances under the Income Tax Act and has also announced tax exemption for expenditure on COVID-19 treatment and ex-gratia received on death due to COVID-19. It has been decided to provide an income-tax exemption to the amount received by a taxpayer for medical treatment from an employer or from any person for treatment of Covid-19 during FY 2019-20 and subsequent years.Government of India grants further extension in timeliness of compliances.Tax exemption for expenditure on #COVID19 treatment and ex-gratia received on death due to COVID-19 also announced.@IncomeTaxIndia@FinMinIndia@nsitharamanoffc@PIB_India@ianuragthakurDetails here: pic.twitter.com/VyGnhd11Is— Live Law (@LiveLawIndia) June 25, 2021Further, it has also been decided to provide an income-tax exemption to ex-gratia payment received by family members of a person from the employer of such person or from other person on the death of the person on account of Covid-19 during FY 2019-20 and subsequent years. "The exemption shall be allowed without any limit for the amount received from the employer and the exemption shall be limited to Rs. 10 lakh in aggregate for the amount received from any other persons," the Notification of the Government states. Necessary legislative amendments for effecting these decisions shall be proposed in due the course of time, the ministry said. Extension of Timelines Objections to Dispute Resolution Panel (DRP) and Assessing Officer under section 144C of the Income-tax Act, 1961 for which the last date of filing under that section is 1st June, 2021 or thereafter, may be filed within the time provided in that section or by 31st August, 2021, whichever is later.The Statement of Deduction of Tax for the last quarter of the Financial Year 2020-21, required to be furnished on or before 31st May, 2021 under Rule 31A of the Income-tax Rules,1962, as extended to 30th June, 2021 vide Circular No.9 of 2021, may be furnished on or before 15th July, 2021.The Certificate of Tax Deducted at Source in Form No.16, required to be furnished to the employee by 15th June, 2021 under Rule 31 of the Rules, as extended to 15th July, 2021 vide Circular No.9 of 2021, may be furnished on or before 31st July, 2021. [This would leave exactly two months with the individual taxpayers to file their income tax returns (ITR) as most individuals are able to finalise their taxes and ITRs only after they receive their Form 16. The current deadline for filing ITR for FY2020-21 is September 30, 2021.]The compliances to be made by the taxpayers such as investment, deposit, payment, acquisition, purchase, construction or such other action, by whatever name called, for the purpose of claiming any exemption under the provisions contained in Section 54 to 54GB of the Act, for which the last date of such compliance falls between 1st April, 2021 to 29th September, 2021 (both days inclusive), may be completed on or before 30th September, 2021.Last date of linkage of Aadhaar with PAN under section 139AA of the Act, which was earlier extended to 30th June, 2021 is further extended to 30th September, 2021. Last date of payment of an amount under Vivad se Vishwas(without additional amount) which was earlier extended to 30th June, 2021 is further extended to 31st August, 2021. Last date of payment of an amount under Vivad se Vishwas (with additional amount) has been notified as 31st October, 2021. Time Limit for passing assessment order which was earlier extended to 30th June, 2021 is further extended to 30th September, 2021. Time Limit for passing penalty order which was earlier extended to 30th June, 2021 is further extended to 30th September, 2021. Time Limit for processing Equalisation Levy returns which was earlier extended to 30th June, 2021 is further extended to 30th September, 2021.Complete details here

Finance Ministry Extends Deadline Of IT Act Compliances; COVID Treatment Expenditure & COVID Death Ex-Gratia Exempted From Tax

Sparsh Upadhyay

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