All Recent Amendment & Changes in Income Tax: A Compilation:
Lockdown, Extensions, Notifications etc have resulted in number of changes in the Income Tax Department compliances. It is almost difficult to keep a constant track of all such changes which has been carried out over last few months on regular basis. Further changes have also been effected as a result of Union Budget 2020 which has also resulted in some changes in the law and procedure now.
Here is an attempt to compile the same for the benefit of all the readers:
- Normally, the last date for filing tax returns is July 31, However, for AY 2020-31, ITR filing date has been extended till November 30, 2020 due to pandemic Covid-19.
- ITR forms have been changes and rebooted. There are various new disclosure requirements in the new ITR forms 1to 7 like
– House ownership: Individual taxpayers who are joint owners of house property cannot file ITR 1 or ITR4.
– Taxpayer have to disclose the Passport number if held by the taxpayer. This is to be furnished both in ITR 1-Sahaj and ITR 4-Sugam.
– All those filing ITR 4-Sugam have to compulsorily declare the amount deposited as cash in a bank account, if such amount exceeds Rs 1 crore during the FY. It will be an additional and new compliance for person opting for presumptive taxation scheme.
– Taxpayers spending more than Rs 2 lakh on travelling abroad during the FY have to disclose the actual amount spent.
– If the electricity bills is more than Rs 1 lakh in aggregate during the FY then taxpayers are required to disclose the actual amount if bill.
– Now, investments qualifying for deductions under chapter VIA is required to be given with bifurcation of details of investment made during the period from April 1, 2020 to June 30, 2020.
- Scope of Form No. 26AS has been widened. It will now reflect complete profile of the taxpayer w.e.f. 01.06.2020. CBDT vide its Notification Dated May 28, 2020 amended Form 26AS prescribed pursuant to Section 285BB w.e.f. 01.06.2020 in the following line:
– Now, form 26AS will also provide information in respect of “Specified financial transactions” which include transactions of purchase/ sale of goods, property, services, works contract, investment, expenditure, taking or accepting any loan or deposits of such value as may be prescribed but not less than of Rs 50,000.
– It will also contain information about income tax demand, refund, proceedings pending, and proceedings completed which may include assessment, reassessment under section 148,153A 153C, revision, appeal will also be shared in this form 26AS.
– Form 26AS, as earlier, will be updated regularly within 3 months from the end of the month in which such information is received.
– Any adverse action initiated or taken or found or order passed under any other law such as custom , GST , Benami Law etc. including information about Turnover , import , export etc. will also find place in form 26AS
– Information received by Tax Department from any other country under the treaty /exchange of information about income or assets of the taxpayer located outside India will also be updated therein.
In short, now all banks, financial institutions or any other authority or customer , buyer etc. while dealing with other person may ask for Form No. 26AS in order to carry out the due diligence of that person/ corporate concerned. Now, it will be impossible for any taxpayer to hide information from any bank / financial institution/ authority about any proceedings against under any law or tax demand, tax disputes etc.*.
- From FY 2020-21, Taxpayer have an option to either opt for new income tax regime or old tax regime. New tax regime is a lower tax regime but without any exemptions and Deductions. The taxpayers must work out the about which tax regime they should opt for well in advance and plan investments accordingly.
- Conveyance Allowance granted to meet expenditure incurred on conveyance in performance of duties of an office and any allowance granted to an employee to meet the cost of travel on tour or on transfer (including relocation) is tax free.
- Interest received from post office savings account balance up to ₹3,500 annually per individual will remain free from tax.
- Any scholarship granted to meet education costs is tax exempt under Section 10 (16) of the Income Tax Act.
- Any sum assured and any bonus received on maturity or surrender of the life insurance plan is tax free under section 10 (10D) of the Income
Tax Act subject to the condition that the premium doesn’t exceed 10% (earlier 20%) of the sum assured. It may be noted that such maturity proceeds will continue to be exempt under Section 10(10D) even in the new regime. Further, maturity amount including interest received on the Sukanya Samriddhi Yojana will not have any income tax.
- Gratuity received from the employer up to ₹20 lakh after rendering 5 years of continuous service is free from income tax.
- Leave encashment received at the time of resignation or retirement up to ₹3 lakh is also tax exempt.
