The I-T Department on Monday gave a one-time relaxation to taxpayers who have not yet verified their e-filed tax returns for assessment years 2015-16 to 2019-20, and asked them to complete the verification process by September 30, 2020.

A taxpayer filing Income Tax Returns (ITR) electronically without digital signature has to verify it using either Aadhaar one-time password (OTP), or logging into e-filing account through net banking, or by Electronic Verification Code (EVC) or by sending a duly signed physical copy of ITR-V through post to CPC Bengaluru within 120 days of uploading the ITR.

The Central Board of Direct Taxes (CBDT) in an order said that a large number of electronically filed ITRs still remain pending with the IT Department for want of receipt of a valid ITR-V (Verification) form at Centralised Processing Centre (CPC), Bengaluru from the taxpayers concerned.

It said non-filing of ITR-V within time can lead to returns being declared as 'non-est'.

As a one-time measure for resolving the grievances of the taxpayers associated with non-filing of ITR-V for earlier assessment years and to regularise such returns which have either become 'non-est' or have remained pending for non-filing or non-receipt of ITR-V form, the CBDT has permitted verification of electronically filed tax returns for assessment years 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 either by sending a duly signed physical copy of ITR-V to CPC Bengaluru through speed post or through EVC/OTP modes.

The Income Tax Department has facilitated a new functionality for banks and post offices through which they can ascertain the TDS applicability rates on cash withdrawals above Rs 20 lakh in case of a non-filer and above Rs 1 crore in case of a filer of the income tax return (ITR). So far, more than 53,000 verification requests have been executed successfully on this facility.

CBDT today said that this functionality available as “Verification of applicability u/s 194N” in since 1st July 2020 is also made available to the banks through web-services so that the entire process can be automated and be linked to the banks’ internal core banking solution.

Explaining the details of this facility, CBDT said that now banks/post offices have to only enter the PAN of the person who is withdrawing cash for ascertaining the applicable rate of TDS. On entering PAN, a message will be instantly displayed on the departmental utility: “TDS is deductible at the rate of 2% if cash withdrawal exceeds Rs 1 crore” (if the person withdrawing cash is a filer of the income-tax return) and “TDS is deductible at the rate 2% if cash withdrawal exceeds Rs 20 lakh and at the rate of 5% if it exceeds Rs 1 Crore” (if the person withdrawing cash is a non-filer of ITR).

CBDT said that the data on cash withdrawal indicated that a huge amount of cash is being withdrawn by the persons who have never filed ITRs.

The income tax department on Friday asked officers to process returns filed up to the assessment year (AY) 2017-18 with refund claims by October 31, 2020.

In an order, the Central Board of Direct Taxes (CBDT) extended the time given to the tax officers to process such returns, which were not picked up for scrutiny, from earlier date of December 31, 2019.

“To mitigate genuine hardship being faced by the taxpayers on this issue, Board … hereby relaxes the timeframe…and directs that all validly filed returns up to the assessment year 2017-18 with refund claims which could not be processed and which have become time barred…can be processed now with prior administrative approval of principal CCIT/CCIT concerned and intimation of such processing…can be sent to the assessee by October 31, 2020,” the CBDT said.

In order to clear old-pending income tax refunds of taxpayers till the financial year 2016-17, the CBDT had issued an order last year allowing taxpayers to file claim for their pending refunds till and issuance of such refunds by tax authorities by December 31, 2019.

Nangia & Co LLP Partner Shailesh Kumar said, “This is a welcome step from the government, which will not only allow taxpayers to receive their legitimate refunds, but more importantly help them improve their liquidity in these stressed times due to COVID-19.”

Many retail investors trade in equities on a regular basis, resulting in small capital gains or losses. But many of them used to casually ignore mentioning the details in their Income Tax Return (ITR). Due to unavailability of data on capital gains, the Income Tax Department was also not in a position to detect the non-disclosure.

However, things are now going to change as a formal Memorandum of Understanding (MoU) was signed today between the Central Board of Direct Taxes (CBDT) and market regulator Securities and Exchange Board of India (SEBI), via a video conference, for exchange of data between the two organisations.

This will facilitate sharing of data and information on automatic, regular, request and suo moto basis between the two authorities.

In fact, to make disclosure of information on equity and equity related transactions stringent, the Income Tax (I-T) Department had added a new sheet in relevant ITR Forms last year in the midst of the Income Tax Return (ITR) filling session, named Schedule 112 A – From sale of equity share in a company or unit of equity oriented fund or unit of a business trust on which STT is paid under section 112A – while modifying the ITR on July 11, 2019.

In her first Budget, Finance Minister Nirmala Sitharaman had also mentioned that the Form 26AS would contain the data related to capital gain/loss as well and the SEBI will be asked make arrangements to furnish data related to transactions made in equities and equity-oriented schemes of respective PAN holders.

A lobby group representing U.S. technology giants has said its members are not yet ready to make the first payment of the country's digital tax due this week, urging New Delhi to defer the move. India in March said all foreign billings for digital services provided in the country would be taxed at 2% from April 1, a move that caught U.S. technology firms off guard as they were battling the coronavirus pandemic.

The tax applies on e-commerce transactions on websites such as Amazon.com. Google in particular has been worried as the tax applies on advertising revenue earned overseas if those ads target customers in India.

The first quarterly payment of the tax is due on Tuesday, but in a letter on July 6 lobby group U.S.-India Strategic Partnership Forum (USISPF) urged the finance ministry to defer the tax or postpone the date for payment. The group argued the tax was "riddled with various ambiguities and interpretational concerns" and it wasn't clear on what amount the companies needed to pay the levy.

"There are practical difficulties in meeting this timeline," USISPF wrote to the finance ministry in the letter, reviewed by Reuters. The finance ministry did not respond to a request for comment. USISPF's managing director for India, Nivedita Mehra, said the organisation had sent the letter to the finance ministry because it wanted to request help in resolving concerns of their member companies.

Investments by sovereign wealth funds (SWFs) and pension funds in 34 key infrastructure sectors including hotels, cold chains, educational institutions, hospitals and gas pipelines will get tax exemptions on some categories of incomes, the Central Board of Direct Taxes (CBDT) said on Tuesday.

In this regard, the CBDT aligned the definition of infrastructure with the harmonised master list of infrastructure sub-sectors notified by the Department of Economic Affairs in August, 2018.

These changes were proposed in the Budget and the Finance Act, 2020, provided the wholly-owned subsidiary of Abu Dhabi Investment Authority, SWFs and pensions funds exemptions on interest income, dividends and capital gains arising out of investment in infrastructure in India.

The alignment broadens the scope of the move as the master list includes sub-sectors such as infrastructure for special economic zones (SEZs), textile parks, agriculture markets, telecom towers, electricity generation, transmission and distribution, apart from ports and airports.

“This notification shall come into force from the 1st day of April, 2021 and shall be applicable for AY (assessment year) 2021-22 and subsequent assessment years,” the Central Board of Direct Taxes said on Tuesday. Investments have to be made before March 31, 2024, and with a minimum lock-in period of 3 years, FM Nirmala Sitharaman had said in her Budget speech, when she announced the move.

With this, the government is looking to incentivise investment in these sectors either directly or through vehicles such as alternate investment funds (AIFs) or Infrastructure Investment Trusts.

Amid rising number of coronavirus cases, the tax department may have to come out with more measures and further extend the timelines to help the taxpayers comply with the statutory norms, according to experts. Although tax experts have welcomed the host of initiatives taken by the Finance Ministry to help the taxpayers in times of unprecedented crisis created by coronavirus pandemic, they feel that something more may have to be done till the normalcy returns.

Among other measures, the Income Tax Department has extended various timelines to help the taxpayers remain on the right side of the law even during the times of pandemic and repeated extensions of lockdowns to prevent spread of coronavirus.

Observing that major relief measures in terms of extension of timelines and interest waivers were undertaken by the government through an Ordinance on March 31, Gaurav Mohan, CEO AMRG & Associates said, "Considering the current situation, more and more relief measures are needed for the taxpayers to keep the economy rolling which are being introduced with time".

The income tax department has amended the TDS form, making it more comprehensive and mandating deductors to state reasons for non-deduction of tax. As per the amended form, banks will also have to report Tax Deducted at Source (TDS) for cash withdrawals above Rs 1 crore.

Through a notification, the Central Board of Direct Taxes (CBDT) has amended Income Tax Rules to include TDS on e-commerce operators, dividend distributed by mutual funds and business trusts, cash withdrawals, professional fees and interest.

Nangia & Co LLP Partner Shailesh Kumar said with this notification, the government has revised the format of forms 26Q and 27Q, where details of TDS amount deducted and deposited on various resident and non-resident payments are required to be filled.

Form 26Q is used for quarterly filing of TDS returns on any payment other than salary to Indian residents by the government or corporates operating in India.

Form 27Q is used for quarterly filing of TDS returns electronically on any payment other than salary to non- residents, including NRIs and foreigners. Except for government deductors, it is mandatory for all other deductors to mention their PAN in the form.

The income-tax department has introduced changes to the form used to pay equalisation levy, to include the option of paying up the new 2% levy on digital transactions conducted in India by foreign e-commerce companies.

The new levy was introduced in the Union Budget and was made effective from April 1, with the first instalment payment due on July 7.

The IT department has amended the challan ITNS 285 – which is used to pay the levy – through an online mechanism. The changes now include ‘e-commerce operator for e-commerce supply or services’ under type of deductor category, and permanent account number of PAN of the deductor or the e-commerce company has been sought.

Importantly, the modified challan provides for 'Outside India' option while seeking the address details of the payee, enabling foreign companies to key in details and make the payment due.

The move comes as government authorities stood their ground on implementation of the new levy, even as the United States has opened an investigation into evaluating whether the digital taxes imposed by India and nine other countries, discriminates against US-based companies.

Expediting the process of issuing income tax refunds during the coronavirus pandemic, the income tax department issued tax refunds at the speed of 76 cases per minute from 8th April to 30th June.

"During this period of just 56 weekdays, the Central Board of Direct taxes (CBDT) has issued refunds in more than 20.44 lakh cases amounting to more than Rs. 62,361 crore," the finance ministry said in a release today.

Income tax refunds amounting to Rs. 23,453.57 crore have been issued in 19,07,853 cases to taxpayers and corporate tax refunds amounting to Rs. 38,908.37 crore have been issued in 1,36,744 cases to taxpayers during this period.

"Refunds of this magnitude and numbers have been issued completely electronically and have been directly deposited into the bank accounts of the taxpayers. Unlike what used to happen some years ago, in these refund cases, no taxpayer had to approach the department to request for release of refund. They got refunds directly into their bank accounts," the ministry said.

India figures among the top-three countries getting detailed information from Switzerland about bank accounts and beneficiary ownership of entities established by their residents in the Alpine nation, according to the latest study by OECD's Global Forum on transparency and exchange of information for tax purposes.
In its latest peer review report on the exchange of information on request, the Global Forum, which is tasked to assess the standard of exchange of information on request by various jurisdictions worldwide and their compliance, said Switzerland is rated 'largely compliant'.
India is also rated as 'largely compliant' by this OECD (Organisation for Economic Cooperation and Development) body.
The Global Forum review said Switzerland has made "significant improvements in the areas of availability of legal ownership information, exchange of information on deceased persons and requests based on stolen data".
It, however, said some challenges remain with regard to the availability of beneficial ownership information and proper implementation of rights and safeguards to ensure effective exchange of information and confidentiality requirements.

The Union Budget 2020 had introduced a new income tax regime under Section 115BAC of the Income Tax Act, giving an option to individual taxpayers and Hindu Undivided Families (HUFs) to pay income tax at lower rates. The new system is applicable for income earned between April 1, 2020 and March 31, 2021 (FY 2020-21), which relates to AY 2021-22.
Now, in a bid to give further relief to taxpayaers, the CBDT has amended Rule 2BB, notifying that a salaried employee who opts for the new income tax regime can claim certain exempt allowances.

It may be noted that Section 115BAC(2) of the Income Tax Act prescribes the list of deductions /exemptions which are not available for deduction while computing total income if a taxpayer opts for the concessional tax regime. However, the provision empowers the CBDT to prescribe certain exemptions available under Section 10 which can be availed by the employees.

Several direct tax deadlines including those for linking of PAN with Aadhaar, completing tax saving investments for financial year 2019-20 and for companies to issue Form 16 to employees, have been extended again. This has been done to give further relief to individuals due to on-going coronavirus pandemic.

As per the notification issued by the government dated June 24, 2020 (effective from June 30, 2020), the deadline to file belated and/or revised tax return for FY 2018-19 has been extended to July 31, 2020. The deadline for making tax-saving investments and expenditures to claim tax breaks under Section 80C, 80D etc for FY 2019-20 has also been further extended to July 31 from the earlier time limit of June 30,2020. The date for issuance of TDS certificates i.e. Form 16, Form 16A etc. has been extended to August 15, 2020.

For those taxpayers who failed to complete their tax planning exercise for the financial year 2019-20 by March 31, 2020, the last date is nearing. Even though there is no change in the financial year, the taxpayer will still be able to save tax for the FY 2020. Due to nationwide lockdown, many of us were unable to make a payment towards various tax-saving investment options.

The government had extended the last date till June 30, 2020 for the investors to save tax for FY 19-20. One has, therefore, a few days left to claim tax benefits under Section 80C, 80D, and 80G.

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For saving tax and growing wealth, you can start a National Pension Scheme (NPS) account. NPS is regulated by PFRDA. It is a tool to accumulate lumpsum and monthly income for living life post-retirement.

Several Mauritius-based foreign portfolio investors are relooking at their investment company structures, after a recent order by a quasi-judicial body denying benefits of grandfathering provisions under the India-Mauritius Double Tax Avoidance Agreement treaty to private equity firm Tiger Global.

Some of them are making sure that investment decisions are made in Mauritius. Entities that normally hire common directors on boards are also now replacing them. In many cased, tax officials have pointed out that companies rope in some professionals who are directors of hundreds of such firms in Mauritius.

Even some of the smallest things like book keeping or holding quarterly meetings have started In Mauritius and Singapore, say people in the know.

The first quarter advance tax collection from India Inc has been revised upward to Rs 39,880 crore from initial mop up of Rs 8,572 crore as payments by some heavyweight companies have come late due to Covid-19 limitations, said CBDT sources. In some cases, banks are still updating the final figures.

According to the latest numbers, the corporation advance tax payments showed a dip of 40 per cent as on June 17 over Rs 65,558 cr in the same period a year ago.

Personal income advance tax payments declined almost 48 per cent at Rs 6,775 crore from Rs 13,025 crore over the same period.

As such, the rate of fall in the advance tax collections shown till June 15 declined.

Interestingly, the initial collections reported on Tuesday showed a decline of 76 per cent from the collection from corporate.

With this, the gross direct tax collection came to Rs 1,73,970 crore, down 24.4 per cent as on June 17 this financial year against Rs 2,30,245 crore of the same period in the previous year.

Factoring in refunds of Rs 48,903 crore against the Rs 62,813 crore in this period, net direct collections fell by 25.3 per cent to Rs 1,25,065 crore from Rs 1,67,432 crore over the period under review.

Reflecting the economic contraction in the pandemic-hit first quarter of the current fiscal year, gross direct tax collections so far for the June quarter were a nearly third lower than the year-ago period at Rs 1.38 lakh crore. Corporate advance tax collections were down 79% on year in the period while advance payments of personal income tax were lower by 65%.

The total collections of advance taxes, a mechanism used by the large individual and corporate taxpayers, were just Rs 11,714 crore till the June 15 deadline, less than a quarter of Rs 48,917 crore collected in the year-ago period.

Apart from Covid-19 lockdown which brought economic activities to a grinding halt in early April, the collections in the current quarter are also impacted by the lower rates for corporate tax and minimum alternate tax (MAT) announced last year.

The Central Board of Direct Taxes has recently notified the income tax returns for the AY 2020-21. The tax returns are in line with the Finance Act amendments for the FY 2019-20 and include relief measures announced due to COVID-19. For the FY 2019-20, the government had earlier provided relief by extending the time for making tax-saving investments until 30 June 2020.

The notified income tax return forms enable taxpayers to claim tax deductions for tax-saving investments, payments, donations and investments for capital gains exemption, made during the extended period until 30 June 2020. The income tax returns consist of a separate schedule (Schedule DI) requiring a taxpayer to specify the amount of the investment or expenditure in respect of which they wish to claim a deduction. The deduction is allowed within the aggregate eligible limits available for FY 2019-20 under the different provisions of the Income Tax Act.

The scope of filing income tax return has been expanded to include taxpayers who are individuals, Hindu Undivided Family (HUF) and partnership firms who are not otherwise required to file an income tax return. Such taxpayers should file a tax return if they meet any of the below criteria:

# Deposit of an aggregate amount which exceeds Rs 1 crore in one or more current accounts with a bank (including a co-operative bank).

Due to the coronavirus pandemic, the government has extended the date till June 30 for making various investment/payment for claiming deduction for FY 2019-20. It includes National Pension Scheme (NPS) and other Section 80C investments like PPF and NSC. From April, new income tax rates came into effect. However, the old tax slabs will also remain in effect, giving a choice to the individual to opt between the two.

Under the new tax rates, there is zero tax for income up to Rs. 2.5 lakh; 5% for income between Rs. 2.5 lakh and up to Rs. 5 lakh; 10% for income between Rs. 5 lakh and up to Rs. 7.5 lakh; 15% for income between Rs. 7.5 lakh and up to Rs. 10 lakh; 20% for income between Rs. 10 lakh and up to Rs. 12.5 lakh; 25% for income between Rs. 12.5 lakh and up to Rs. 15 lakh; 30% for income above Rs. 15 lakh.

1) You will not be eligible for some of the tax benefits on NPS contribution if you opt for the new tax rates.

2) If you opt for the new tax rates, you can still claim income tax deduction on employer contribution towards employee’s NPS account. If your employer is contributing towards your NPS account, a deduction of up to 10% of salary (basic + DA) irrespective of any limit qualifies for income tax deduction under Section 80 CCD(2).

3) Central government employees enjoy a higher limit of 14% of the salary. For others, the limit is 10%.

4) This benefit is also available if you stick to the old income tax regime.

5) If you stick to the old income tax regime, you can claim exclusive deduction of Rs. 50,000 under Section 80CCD (1B).

Finance Minister Nirmala Sitharaman on Monday said the government will consider an extension in the deadline for availing the lower 15 per cent corporate tax rate on new investments, due to the COVID-19 pandemic.

In the biggest reduction in 28 years, the government in September last year slashed corporate tax rates by up to 10 percentage points to attract private investment and push sagging economic growth.

Base corporate tax for existing companies was reduced to 22 per cent from 30 per cent, and to 15 per cent from 25 per cent for new manufacturing firms incorporated after October 1, 2019, and starting operations before March 31, 2023.

“I will see what can be done. We want industry to benefit from the 15 per cent corporate tax rate on new investments and I take your point for considering an extension in the deadline of March 31, 2023,” Sitharaman said.

Addressing members of FICCI, the minister assured the industry of all possible government support with the intent of supporting Indian business and reviving the economy.

Sitharaman clarified that the COVID-19 Emergency Credit Facility covers all companies and not just micro, small and medium enterprises (MSMEs).

On the question of liquidity, she said, “We have fairly clearly addressed the issue of liquidity. There is definitely the availability of the liquidity. We will look into it if there are still issues.” She also said every government department has been told to clear dues and if there is any issue with any department, the government will look into it.