Income Tax Quarterly Updates (April 2021 – June 2021)– Including Covid-19 relaxations / updates
Income Tax is the tax that is collected by the Central Government for each financial year levied on the total taxable income of an assessee during the previous year.The Income Tax Act is a comprehensive statute that focuses on the different rules and regulations that govern taxation in the country. It provides for levying, administering, collecting and recovering income tax for the Indian government. It was enacted in 1961.
Income Tax including surcharge (if any) & cess is charged for any person at the rate as prescribed by Central Act for that assessment year. Income-tax Act has provided separate provisions with respect to levy of tax on income received in advance as well as the income with respect of which the amount has not yet been received. A person also has to keep track of his TDS deducted while calculating his final tax liability at the end of the year.
INCOME TAX Circulars in brief:
1. “Compliance Check for Section 206AB & 206CCA”:
The Central Board of Direct Taxes (‘CBDT’), in exercise of powers conferred under section 138 (1) (a) (i) of Income-tax Act, 1961, hereby directs that Director General of Income-tax (Systems), New Delhi shall be the specified income-tax authority for furnishing information to the ‘Tax Deductor / Tax Collector’, having registered in the reporting portal of the Project Insight through valid TAN, to identify the ‘Specified Persons’ for the purposes of section 206AB and 206CCA of the Act through the functionality “Compliance Check for Section 206AB &; 206CCA”.To read more: Click Here
2. Government extends tax deadlines, exempts funds received for COVID-19 treatment:
The CBDT has also granted relaxation for uploading Forms 15G/H – declarations to be submitted to banks to avoid deduction of tax on interest earned – for the quarter ended June 30, 2021.
The Central Board of Direct Taxes (CBDT) has extended several income tax-related timelines once again due to the disruptions caused by the pandemic. Individuals who received financial support from their employers, friends or relatives for their COVID-19 treatment will not have to pay tax on the amount received.
3. Breather for reinvestment of gains on property sale:
Those running out of time to reinvest long-term capital gains (LTCG) made on sale of property have got a breather too. If the last date for reinvesting in your case falls between April 1 and September 29, 2021, you now have time till September 30, 2021 to complete the process. As per section 54 of the Income Tax Act, such gains are exempt from tax if the amount is reinvested in another residential property within two years from the date of transfer. Alternatively, they have the option to construct a new property three years from the transaction date. Under section 54EC, they can also invest the gains in specified long-term bonds issued by entities such as National Highway Authority of India (NHAI) and Rural Electrification Corporation (REC) within six months of the transfer.
4. Cabinet gives ex-post facto approval for amendments to Finance Bill, 2021:
The Union Cabinet on Tuesday gave ex-post facto approval to the official amendments to the Finance Bill, 2021, which were aimed at clarifying and rationalising tax proposals for 2021-22. The Finance Bill became the Finance Act, 2021 on March 28, 2021 after receiving the President’s nod. An official release said that the government’s amendments to the Finance Bill, 2021 tried to address the concerns of the stakeholders with regard to the tax proposals for the fiscal.
5. New rules notified for determining deemed consideration for slump sale; key things to know:
Union Budget 2021 introduced significant amendments in the provisions relating to the taxation of slump sale transactions. One of the key amendments is in relation to computation of consideration value for slump sale taxation. Earlier, the consideration actually paid or received on the slump sale was considered for determining the capital gains tax on the sale. CBDT has now prescribed the rules containing the mechanism relating to computation of the FMV in slump sale transactions.
The Finance Act, 2021 has however provided that to compute the tax arising on account of such slump sale, the Fair Market Value (FMV) of the capital assets (being an undertaking or division transferred by way of slump sale) shall be deemed to be full value of the consideration. However, the methodology to compute FMV was not prescribed by the Finance Act, 2021.
Monthly Updates with official links
Monthly Updates / Circulars / Notification – April 2021
| Sl. | Particulars of the Notification(s) | File No. / Circular No. | Link(s) |
| 1. | Extension of time lines related to certain compliances by the Taxpayers underthe Income-tax Act 1961 | Circular No. 08/2021 | LINK |
| 2. | Format, Procedure and Guidelines for submission of Statement of Financial Transactions(SFT) for MF Transactions by Registrar and Share Transfer Agent | Notification No. 4 of 2021 | LINK |
| 3. | Format, Procedure and Guidelines for submission of Statement of Financial Transactions(SFT) for Depository Transactions | Notification No. 3 of 2021 | LINK |
| 4. | the Income-tax (12th Amendment) Rules, 2021 | Notification No. 40/2021] [F.No. 370142/8/2021-TPL | LINK |
| 5. | TheIncome-tax (11th Amendment) Rules, 2021. | Notification No. 37/2021/ F. No. 370142/28/2020-TPL | LINK |
| 6. | The Income-tax (7th Amendment) Rules, 2021 | Notification No. 21/ 2021 | LINK |
| 7 | Facilitation of the conduct of Faceless Assessment proceedings under section 144B of the said Act, | Notification No. 22/2021/F. No. 187/3/2020-ITA-I | LINK |
| 8 | To facilitate the conduct of Faceless Assessment proceedings under section 144B of the said Act | Notification No. 23/2021/F. No. 187/3/2020-ITA-I | LINK |
| 9 | Central Board of Direct Taxes | Notification No. 24/2021/F. No. 187/3/2020-ITA-I | LINK |
| 10 | The Central Board of Direct Taxes hereby authorises the Assistant Commissioner of Income-tax/Deputy Commissioner of Income-tax (NaFAC) | Notification No. 25/2021/F. No. 187/3/2020-ITA-I | LINK |
| 11 | TheIncome-tax (eighth Amendment) Rules, 2021. | Notification No. 28 /2021/F. No 370142/9/2018-TPL | LINK |
| 12 | Agreement between the Government of the Republic of India and theGovernment of the Islamic Republic of Iran for the avoidance of double taxation and prevention of fiscalevasion with respect to taxes on income | Notification No.29/2021/F.No.501/03/92-FTD-II | LINK |
| 13 | CBDT authorizes theDirector of Income Tax(Centralized Processing Centre), Bengaluru and Commissioner of Income-Tax (Exemption),Bengaluru for various matters | Notification No. 30 /2021/F.No. 370142/4/2021-TPL | LINK |
| 14 | TheIncome-tax(9th Amendment) Rules, 2021 | Notification No. 31/2021 / F.No.370142/19/2019-TPL | LINK |
| 15 | The Income-tax (10th Amendment) Rules, 2021 | Notification No. 32 /2021 | LINK |
| 16 | Number of unique investors across Mutual Fund schemes also increased by 10% in FY 2020-21 | Twitter Updates | LINK |
| 17 | TheCentralGovernment hereby specifies the sovereign wealth fund | Notification No. 33/2021/ F. No. 370142/6/2021-TPL | LINK |
| 18 | Format, Procedure and Guidelines for submission of Statement of Financial Transactions(SFT) for Dividend income | Notification No. 1 of 2021 | LINK |
| 19 | Format, Procedure and Guidelines for submission of Statement of Financial Transactions(SFT) for Interest income | Notification No. 2 of 2021 | LINK |
| 20 | TheCentralGovernment hereby specifies the pension fund, namely, the Canada Pension Plan Investment Board | Notification No. 34/2021/F. No. 370142/39/2020-TPL | LINK |
Monthly Updates / Circulars / Notification – May, 2021
| Sl. | Particulars of the Notification(s) | File No. / Circular No. | Link(s) |
| 1. | The Income-tax (12th Amendment) Rules,2021. | Notification No. 40/2021][F.No. 370142/8/2021-TPL | LINK |
| 2. | Extension of time lines related to certain compliances by the Taxpayers underthe Income-tax Act 1961 | Circular No. 08/2021 | LINK |
| 3. | Format, Procedure and Guidelines for submission of Statement of Financial Transactions(SFT) for MF Transactions by Registrar and Share Transfer Agent | Notification No. 4 of 2021 | LINK |
| 4. | Format, Procedure and Guidelines for submission of Statement of Financial Transactions(SFT) for Depository Transactions | Notification No. 3 of 2021 | LINK |
| 5. | Amendments in the notification of theGovernment of India, Ministry of Finance, (Department of Revenue), number 85/2020, dated the 27th October, 2020, | Notification No. 39/2021/ F.No. IT(A)/01/2020-TPL | LINK |
| 6. | TheIncome-tax (11th Amendment) Rules, 2021. | Notification No. 37/2021/ F. No. 370142/28/2020-TPL | LINK |
| 7 | TheIncome-tax (13th Amendment) Rules, 2021. | Notification No. 41 /2021/ F. No. 370142/11/2018-TPL | LINK |
| 8 | TheIncome-tax (14th Amendment) Rules, 2021 | [Notification No. 42/2021 | LINK |
| 9 | TheCentralGovernment hereby specifies the pension fund, namely, the Caissede dépôt et placement du Québec | Notification No. 43/2021 | LINK |
| 10 | TheCentralGovernment hereby specifies the pension fund, namely, the CDPQ Infrastructures Asia III Inc. | Notification No. 44/2021 | LINK |
| 11 | TheIncome tax (15th Amendment),Rules, 2021. | Notification No. 50/2021 | LINK |
| 12 | Modificationof the Notification No. 14/2015 dated 16.02.2015 | Notification No. 47/2021 | LINK |
| 13 | Govt eases income tax norms for cash received by hospitals providing Covid treatment | Notification No. 56/2021 | LINK |
| 14 | Extension of time limits of certain compliances to provide relief totaxpayers in view of the severe pandemic | Circular No. 9 of 2021 | LINK |
| 15 | Income Tax department to launch new e-filing portal for taxpayers on June 7 | Newspaper | LINK |
| 16 | Procedure for exercise of option under sub-section (1) of section 245M and intimation thereof by furnishing and upload of Form No. 34BB under sub-rule (1) of Rule 44DA of Income-tax Rules, 1962. | Notification No. 05 of 2021 | LINK |
| 17 | Extension of time limits of certain compliances to provide relief to taxpayers in view of the severe pandemic | Circular No. 9 of 2021 | LINK |
| 18 | TheIncome- tax (16th Amendment) Rules,2021 | Notification No.68 /2021/F. No.370142 /16 /2021-TPL | LINK |
| 19 | Clarification regarding the limitation time for filing of appeals before the CIT(Appeals) under the Income-tax Act, 1961 (the Act) | Circular No. 10/2021 | LINK |
Monthly Updates / Circulars / Notification – June, 2021
| Sl. | Particulars of the Notification(s) | File No. / Circular No. | Link(s) |
| 1. | Guidelines under section 1940 of the Income-tax Act, 1961 – reg. | Notification No. 40/2021][F.No. 370142/8/2021-TPL | LINK |
| 2. | The Central Government specifies the Nodal officers | F. No. 225/53/2020-ITA.II/Notification No.69 /2021 | LINK |
| 3. | TheCentral Government hereby approves M/s Indian Institute of Technology, Bhilai (PAN: AABAI0415K) under thecategory of ‘University, College or other institution’ | Notification No. 70 /2021) F.No.203/ 06/ 2020/ ITA-II | LINK |
| 4. | TheIncome-tax (17th Amendment) Rules, 2021 | Notification No. 71/2021/F. No. 370142/19/2021-TPL | LINK |
| 5. | Amendments in thenotification of the Government of India, published in the Gazette of India, Extraordinary, vide number S.O. 1790(E), dt. 05.06.2017 | Notification No. 73/ 2021 | LINK |
| 6. | Compliance Check Functionality for Section 206AB & 206CCA of Income-tax Act 1961 | Circular No. 11 of 2021 | LINK |
| 7 | Extension of time limits of certain compliances to provide relief to taxpayers in view of the severe pandemic. | Circular No. 12/2021 | LINK |
| 8 | Partial modification – Taxationand Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 | Notification No. 74/2021/ F. No. 370142/35/2020-TPL | LINK |
| 9 | Amendments – Direct Tax Vivad seVishwas Act, 2020 | Notification No. 75/2021 | LINK |
Income Tax Due Date – Extensions
| Sl. | Nature of Extension | Provisions of IT Act 1961 | Original Due Date | Extended Due Date |
| 1 | Objections to Dispute Resolution Panel (DRP) and Assessing Officer under section 144C of the Income-tax Act, 1961 | Section 144C | 01.06.2021 | 31.08.2021 |
| 2 | The Statement of Deduction of Tax for the last quarter of the Financial Year 2020-21 | Rule 31A of the Income-tax Rules,1962 | 31.05.2021 | on or before 15.07.2021 |
| 3 | The Certificate of Tax Deducted at Source in Form No.16 | Rule 31 of theIncome-tax Rules,1962 | 15.06.2021 | on or before 31.07.2021 |
| 4 | The Statement of Income paid or credited by an investment fund to its unit holder in Form No. 64Dfor the Previous Year 2020-21 | Rule 12CBof theIncome-tax Rules,1962 | 15.06.2021 | on or before 15.07.2021 |
| 5 | The Statement of Income paid or credited by an investment fund to its unit holder in Form No. 64C for the Previous Year 2020-21 | Rule 12CBof theIncome-tax Rules,1962 | 30.06.2021 | on or before 31.07.2021 |
| 6 | The application in Form No.10A/ Form No.10AB, for registration/ provisional registration/ intimation/ approval/ provisionalapproval of Trusts/ Institutions/ Research Associations etc., | UnderSection 10(23C), 12AB, 35(1)(ii)/(iia)/(iii) and 80G of the Act | 30.06.2021 | on or before 31.08.2021 |
| 7 | 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 | Section 54 to 54GB of the Act | Between 01.04.2021 to 29.09.2021 | 30.09.2021 |
| 8 | The Quarterly Statement in Form No. 15CC to be furnished by authorized dealer in respect ofremittances made for the quarter ending on 30th June, 2021 | Rule 37 BB of the Income-tax Rules, 1962 | 30.06.2021 | 31.07.2021 |
| 9 | The Equalization Levy Statement in Form No. 1 for the Financial Year 2020-21 | 30.06.2021 | 31.07.2021 | |
| 10 | The Annual Statement required to be furnished bythe eligible investment fund in Form No. 3CEK for the Financial Year 2020-21 | Section 9A (5) of the Act | 29.06.2021 | 31.07.2021 |
| 11 | Uploading of the declarations received from recipients in Form No. 15G/15H during the quarterending 30th June, 2021 | Form No. 15G/15H | 15.07.2021 | 31.08.2021 |
| 12 | Exercising of option to withdraw pending application (filed before the erstwhile Income TaxSettlement Commission) in Form No. 34BB, w | under Section 245M (1) of the Act | 27.06.2021 | 31.07.2021 |
| 13 | Last date of linkage of Aadhaar with PAN | Section 139AA of the Act | 30.06.2021 | 30.09.2021 |
| 14 | Last date of payment of amount under Vivad se Vishwas(without additional amount) | 30.06.2021 | 31.08.2021 | |
| 15 | Last date of payment of amount under Vivad se Vishwas (with additional amount) | 31.08.2021 | ||
| 16 | Time Limit for passing assessment order | 30.06.2021 | 30.09.2021 | |
| 17 | Time Limit for passing penalty order | 30.06.2021 | 30.09.2021 | |
| 18 | Time Limit for processing Equalisation Levy returns | 30.06.2021 | 30.09.2021 |
Bio of Author:
Company Secretary having 6+ years of post qualification experience in the Compliance Management Services industry by serving Corporates including Listed Companies, Corporate Secretarial Firms and LLP. He has contributed in ICAI, ICSI and MCCI and other various Newsletters. He is also a speaker at various platforms including seminars / webinars.CS LALIT RAJPUT
Bio of Author:
I Am A Chartered Accountant By Profession, Holding Specialization In Investment And Financial Analysis But Direct Taxation Continues To Be My Passion. Other Feathers In My Hat Include Consulting Businesses And Being A Visiting Faculty For Various Professional Courses.CA HEER GAJJAR
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