Domestic and Direct Tax Updates

CBDT issues press release on salient features of new e-filing portal

The Income tax department launched its new e-filing portal www.incometax.gov.in on 7 June 2021 with an aim to provide a modern, seamless experience to taxpayers. Central Board of Direct Taxes (‘CBDT’) issued Press Release on 5 June 2021 highlighting features, which, inter alia, includes :

Immediate processing of Income Tax Returns (ITRs) which will result in quick refunds
Enablement of pre-filling with salary income, interest, dividend and capital gains after TDS and SFT statements.
Functionalities for filing Income Tax Forms, adding tax professionals, Submission of responses to Notices in Faceless Scrutiny or Appeals would be enabled.

However, since its launch on 7 June 2021, users have encountered several technical glitches in various functionalities available on the portal, which has also been duly acknowledged by the Ministry of Finance, India and CBDT. The concerned vendor responsible has initiated actions to resolve the technical glitches.

CBDT extends various time limits under Income Tax Laws

Considering the genuine hardship faced by the tax payers due to Covid-19, CBDT has extended various time limits under the Income Tax Act, 196 (‘ITA’).

Extended time lines affecting majority of tax payers are mentioned below:

Compliance Particulars	Extended due Date
E-TDS return for last quarter i.e. 1 January 2021 till 31 March 2021	15 July 2021
Furnishing of Form No.16 by the employer	31 July 2021
Equalization Levy Statement in Form No. 1	31 July 2021
Processing Equalization Levy Statements	30 September 2021
Payment of disputed tax under Vivad se Vishwas ('VsV') (without additional amount)	31 August 2021
Payment of disputed tax under VsV (with additional amount)	31 October 2021
Linking Aadhaar with PAN u/s 139AA	30 September 2021
Passing of assessment or reassessment order (including search cases) expiring on 30 June 2021	30 September 2021
Passing of Penalty order expiring on 30 June 2021	30 September 2021
Filing an appeal with Commissioner of Appeals – first appellate authority pursuant to Supreme Court vide order dated 27 April 2021	Relaxation from due date till further order
Furnishing Tax Audit Report For FY 2020-21	31 October 2021
Furnishing Transfer Pricing Audit Report For FY 2020-21	30 November 2021
Return of Income of Individuals/HUF/Firm For FY 2020-21: Books of Accounts are not required to be audited Books of Accounts are required to be audited	30 September 2021 30 November 2021
Return of Income of Companies (including foreign companies) For FY 2020-21: Transfer Pricing not applicable Transfer Pricing applicable	30 November 2021 31 December 2021
Filing belated / revised Return of Income	31 January 2022

CBDT issues important guidelines for TDS on purchase of goods under Sect. 194Q

Finance Act, 2021 had introduced a new section 194Q under the ITA which has taken effect from 1 July 2021. There was a lack of clarity on some of the aspects that may be relevant while undertaking Tax Deduction at Source (TDS) compliances under the newly introduced section. In order to resolve the practical difficulties in complying with the provisions of TDS contained in section 194Q of ITA, CBDT has issued certain clarifications vide Circular No. 13 of 2021 dated 30 June 2021.

Please refer to our “Good to know article” in this regard. Read more »

CBDT Issues New “Compliance Check Functionality” for identifying the specified person for applicability of higher rates of TDS/TCS for non-filing of returns

In furtherance to improve compliance of filing return of income, Finance Act, 2021 had introduced Finance Act 2021 introduced section 206AB (in respect of tax deduction) and section 206CCA (in respect of tax collection) with effect from 1 July 2021 to provide for higher tax deducted at source (TDS)/tax collected at source (TCS) rates in in case of certain non-filers (specified persons) with respect to tax deductions and tax collections. Higher rate is twice the prescribed rate or 5 per cent, whichever is higher.

For ease of deductors/collectors, the CBDT has announced introduction of a new compliance check functionality on the reporting portal of the Income tax Department. The functionality enables a status check as to whether a deductee/collectee is a covered person for the purpose of section 206AB and section 206CCA. A search can be conducted on the functionality with the help of the permanent account number (PAN) of the deductee/collectee, either in the form of a single search or a bulk PAN search (in case of large number of deductees/collectees). The list will be updated at the beginning of each financial year.