Tax Season 2.0!! Everything you need to know..

The year 2020 has been a rollercoaster. There has been a lot of confusion around the recent due date extensions, ITR forms, list of documents, slab rates, and tax-saving deductions.

First Due Dates!!

1. As per the Income Tax Notification on 29th July, the due date for belated / revised ITR for FY 2018-19, has been extended to 30th September 2020.

• Revised return can be filed to rectify the details such as incomes, losses, balance sheet, etc reported while filing the original Income Tax Return.

• Investors and traders can also carry forward losses by filing a revised return, provided they have filed the initial ITR before the due date.

• Taxpayers having capital gains from the sale of house property, land, etc in FY 2019-20 can continue to make specific investments to claim the rollover benefit and reducing their tax liability.

• Also, taxpayers have additional time to make specific investments and claim the rollover benefit for capital gains from 30th June to 30th September 2020.

2. Availment of Vivad se Vishwas Scheme – This is an initiative by the Government to put an end to pending direct tax disputes of Taxpayers. The Scheme aims to cater to all the taxpayers having income tax disputes in India. Taxpayers having an extension of an additional 6 months to avail benefits of Vivad Se Vishwas for settlement of Tax disputes. The due date for the same is extended from 30th June 2020 to 31st December 2020.

3. Income Tax compliance due dates for FY 2019-20 (AY 2020-21) – 31st October to file Tax Audit Report and 30th November to file ITR.

Note: Interest on belated Tax Payment was reduced from 12% to 9% as announced on 31st March 2020. This relief has been rolled back, and the interest penalty for belated tax payment continues to be 12% from 30th June 2020.

Note: Reduced Rates for TDS/TCS by 25% on certain non-salary payments to residents for FY 2020-21 remains unchanged.

List of Important Documents

Form 16 – Employers issue Form 16, TDS certificate to employees every year. Due date (under normal circumstances) to issue Form 16 is 15th June. Due to Covid-19, the due for this year was extended to 15th August.

It is divided into 2 parts:

• Part A- Contains details of income earned and the taxes deducted. It also the Permanent Account Number (PAN) and the Tax Deduction Account Number (TAN) of the employer

• Part B- Includes the break-up information of the employee’s gross salary.

Form 16A – The bank will issue you Form 16A providing you the details of the amount of TDS deducted on payments other than salaries such as interest received from fixed deposits, recurring deposits, etc.

Form 16B – When you sell your property, the buyer will issue you Form 16B showing the TDS deducted on the amount paid to you when: you have sold your property.

Form 16C – If you are a landlord earning rental income, then you should ask your tenant to provide you Form 16C. It provides the details of TDS deducted on the rent received by you.

Home Loan Statements from Bank/NBFC – This statement will provide the break-up details of how much principal and interest you’ve paid. The interest paid on the home loan can be claimed under Section 24. The maximum amount one can claim under section 24 is INR 2 lakh.

Capital Gains – If you have gained from the sale of property/mutual funds or if you are a trader, then you will have to report such gains. On the sale of the property, you need to have the purchase and sale deed of that property. In the case of capital gains, statements from mutual fund houses/brokers can prove to be important.

Tax Saving Investments – If you have claimed tax deductions under any section of the Income Tax Act, it is important to have the statements for the same. Although it is not mandatory, it might come in handy.

The most common available tax breaks under section 80C are as follows: a) Employees Provident Fund (EPF) b) Public Provident Fund (PPF) c) Investments in ELSS schemes of mutual funds d) Life insurance premium paid e) National Pension System (NPS) etc.