No tax on covid-related aid for recipients, says FinMin

 








The government won’t levy any income tax on financial aid received by an individual from an employer or others for treatment of covid-19, the finance ministry said on Friday.

In addition, any financial assistance received by family members of a person who has died from the viral disease will not be subject to income tax, the ministry said.

The ministry also announced time extensions for various statutory obligations of taxpayers including for linking permanent account number (PAN) with Aadhaar and for employers to issue tax deducted at source statements to staff.

For aid received by family members of a deceased person, the tax relief will be applicable up to ₹10 lakh if it is given by any person other than the employer of the deceased. Financial assistance offered by an employer, however, won’t have any cap on the tax exempted amount.

Both the measures are applicable for FY20 and subsequent years, and the Income Tax Act will be amended to provide for this relief.

The ministry explained that employers and well-wishers of taxpayers who lost their lives to covid had extended financial assistance to their family members to help them cope with difficulties from the sudden loss of the earning member of the family. The tax exemption will offer relief to these families.

Experts said the measures offer significant relief. “Though the relief is granted retrospectively from FY20 onwards, since the due date for filing income tax return for FY20 has already expired, it would be important to see, whether the government revives the time limit for filing tax returns for FY20," said Shailesh Kumar, partner at Nangia and Co LLP, a consultancy.

The other compliance relief measures announced on Friday will provide extra time to taxpayers and authorities for meeting the deadline, he said.

Taxpayers will now get more time for various statutory obligations including replying to notices issued by the department. For linking PAN and Aadhaar, the deadline has been extended by three months till 30 September.

Also, businesses will now have time till July-end to issue their tax deducted at source (TDS) statements in Form 16 to their workers. The earlier due date after one extension was 15 July.

Individuals claiming capital gains tax exemption from the sale of residential property under sections 54 and 54 GB of the Income Tax Act have been given some flexibility in meeting the riders attached to this benefit. This covers meeting obligations such as investment, deposit, payment and construction. If the due date for meeting these falls between 1 April and 29 September, they could be met by 30 September.

The last date of payment of settlement amount under the Vivad se Vishwas dispute resolution scheme without additional charges has been extended by two months till 31 August. With additional charges, parties settling the dispute can make the payment by 31 October.

Tax officials will also get extra time to meet some of their obligations under law, including for passing assessment orders. For this, the due date has been extended from 30 June to 30 September. The deadline for passing a penalty order, earlier extended to 30 June, has been further extended to 30 September.

Taxpayers have been given more time to meet various compliance requirements including for filing equalization levy returns and other statements and for raising objections to tax officials. These come at a time the income tax department’s new e-filing portal has faced some technical glitches.

Comments

Post a Comment

Popular posts from this blog

Centre appeals against ruling on levy of GST on maintenance charges to resident welfare associations

Image
  The Centre has preferred a writ appeal before the Madras High Court against a single judge's order that flat or villa owners paying more than ₹7,500 a month towards maintenance charges to their residents’ welfare associations must pay Goods and Services Tax (GST) at the rate of 18% only for the amount exceeding ₹7,500 and not for the entire monthly contribution. Justices T.S. Sivagnanam and Sathi Kumar Sukumara Kurup on Wednesday allowed an application filed by the Centre to dispense with production of a certified copy of the judgment passed by Justice Anita Sumanth recently and directed the Registry to list the appeal for admission in the usual course. Justice Sumanth had in July this year quashed an order passed by the Authority for Advance Ruling (AAR) on June 21, 2019 as well as a consequent circular issued by the Department of Revenue under the Union Finance Ministry on July 22, 2019 since both of them had insisted upon collecting GST for entire monthly contribution. The jud...
Read more

Seven key things to know before filing income tax return (ITR) for FY21

Image
  The last date to file income tax return for the financial year 2020-21 has been extended to September 30, 2021. Although there is more than two months left for the deadline to end, it is always recommended to complete the task as soon as possible and not to wait for the last minute. Worth mentioning here is that the income tax department last month launched a new e-filing portal (www.incometax.gov.in) to speed up the processing of tax returns. The I-T department will soon launch a mobile application, having all the features of the new portal. This year taxpayers have to take care of the following changes in the ITR filing process. 1) A new utility named JSON has been launched for filing tax return forms for FY21. At present, only three forms, ITR 1, 2 and 4 have been released. These new forms will import pre-fill data such as personal details, salary income, dividend income, interest income, capital gains and all the information available in Form 26AS. 2) Taxpayers will have the ...
Read more

Income Tax Dept detects ₹350 cr unaccounted cash receipts after raid in Rajkot

Image
  The Income Tax Department carried out a search and seizure operation on a real estate group based in Gujarat's Rajkot and found unaccounted cash receipts in various projects of approximately ₹350 crore, the Finance Ministry said on Friday. The group is among Gujarat’s prominent real estate builders and developers and is actively engaged in real estate, construction and land trading businesses in and around Rajkot. More than 40 premises were covered in the search operation. During the course of operation, many incriminating documents and digital evidences were seized indicating involvement of the group in unaccounted transactions. The IT sleuths found substantial evidence of transactions outside the regular books of accounts, unaccounted cash expenses, cash advances received and interest paid in cash. Evidence of on-money payments in real estate projects-flats, shops and land deals has also been found. Total unaccounted cash receipts in various projects of approximately ₹350 crore...
Read more