Tax Deadlines and New Income Tax Rules in India in 2021
We highlight key tax deadlines in India in 2021, including tax reporting dates, deadlines for audit compliance, and relevant dates for tax and finance obligations. These impact salaried taxpayers, businesses, and senior citizens.
It is important to note the latest dates and avoid incompliance and penalties due to exigencies; many deadlines have been extended (since last year) by the government due to the pandemic.
To prevent confusion regarding key tax reporting dates, businesses are welcome to reach out to our tax advisors at email@example.com.
COVID compliance relief: Deadline extensions to May 31, 2021
Due to adverse circumstances of the COVID-19 pandemic and in view of several requests received from taxpayers, tax consultants, and other stakeholders across India – various compliance dates have been relaxed by the government as can be referenced from the CBDT Circular No.8/2021 in F. No. 225/49/2021/ITA-II dated April 30, 2021. The said Circular is available on www.incometaxindia.gov.in.
- Appeal to Commissioner (Appeals) under Chapter XX of the Act, for which the last date of filing under that Section is April 1, 2021 or thereafter, may be filed within the time provided under that Section or by May 31, 2021, whichever is later.
- Objections to Dispute Resolution Panel (DRP) under Section 144C of the Act, for which the last date of filing under that Section is April 1, 2021 or thereafter, may be filed within the time provided under that Section or by May 31, 2021, whichever is later.
- Income-tax return in response to notice under Section 148 of the Act, for which the last date of filing of return of income under the said notice is April 1, 2021 or thereafter, may be filed within the time allowed under that notice or by May 31, 2021, whichever is later.
- Filing of belated return under sub-section (4) and revised return under sub-section (5) of Section 139 of the Act, for Assessment Year 2020-21, which was required to be filed on or before March 31, 2021, may be filed on or before May 31, 2021.
- Payment of tax deducted under Section 194-IA, Section 194-IB, and Section 194M of the Act, and filing of challan-cum-statement for such tax deducted, which are required to be paid and furnished by April 30, 2021 (respectively) under Rule 30 of the Income-tax Rules, 1962, may be paid and furnished on or before May 31, 2021.
- Statement in Form No. 61, containing particulars of declarations received in Form No.60, which is due to be furnished on or before April 30, 2021, may be furnished on or before May 31, 2021.
For temporary relief measures announced for GST taxpayers in India, see our article here: Relief Measures for Taxpayers Announced Under GST Law Due to Severity of COVID Wave
January 10, 2021
Deadline for salaried taxpayers filing income tax returns
Salaried taxpayers have until January 10 to file their tax returns for FY 2019-20 – without incurring penalty fees for late filing.
The government notified (December 30, 2020) that it had extended the filing date for individuals whose accounts did not require an audit. This is a relaxation on account of the ongoing pandemic.
Relevant tax return forms are: ITR-1, ITR-2, ITR-4.
The late fee for not filing on time is INR 10,000 for those whose annual income exceeds INR 500,000.
January 15, 2021
Latest deadline to submit tax audit reports
The government extended the deadline to submit the tax audit report and reports related to international and specified domestic transactions for FY 2019-20 from December 31, 2020 to January 15, 2021.
January 31, 2021
Deadline to file declaration under tax dispute settlement scheme, Vivad Se Vishwas
January 31, 2021 is the last date for filing a declaration under the Vivad Se Vishwas Scheme. The scheme was introduced in the 2020 Budget for those who wished to settle income tax disputes and reduce pending income tax litigation.
Vivad Se Vishwas facilitates the settlement of disputed tax, disputed interest, disputed penalty, or disputed fees in relation to an assessment or reassessment order on the payment of 100 percent of the disputed tax and 25 percent of the disputed penalty, interest, or fee.
February 15, 2021
ITR deadline for specified individuals, accounts that need to be audited
The last date for filing income tax returns (for FY 2019-20) for individuals whose accounts must be audited or who need to submit a report under Section 92E of the Income Tax Act is February 15, 2021. This affects individuals who have undertaken international or specified domestic financial transactions during the financial year ending 2020.
March 15, 2021
Deadline for advance tax payments
Advance tax liability is incurred when the estimated total tax liability (net of tax deducted at source or TDS) exceeds INR 10,000 in a financial year. Penalty interest will be triggered if the advance tax payment is not made by March 15.
Taxpayers should note that starting April 1, 2020 – the individual receiving divided income will be taxed as per income tax slab rates. (TDS is levied once the dividend income in a financial year is above INR 5,000.)
March 31, 2021
Revised or delayed ITR filing deadline for FY 2019-20
March 31 is the last date for individuals filing revised income tax returns for FY 2019-20.
Also, those individuals who are filing their FY 2019-20 tax returns late and don’t need their accounts to be audited – can do so by March 31, 2021 – but will have to pay the late penalty. This is INR 10,000; however, small taxpayers earning up to INR 500,000 in a financial year will not be required to pay more than INR 1,000 as late filing fee.
Deadline to file returns for FY 2020-21 to save on taxes
Those who wish to reduce their tax liability for FY 2020-21 can file their tax returns by March 31.
Deadline to make payment under Vivad Se Vishwas
For those who have filed a declaration to resolve a tax dispute under this scheme on or before January 31, 2021 must make the required payment by March 31, 2021.
Last date to avail Emergency Credit Line Guarantee Scheme
This scheme was announced under the government’s stimulus package on May 13, 2020. It provides claimants fully guaranteed and collateral-free loans for business purposes (entities and businesspersons). The last date to avail benefits under this scheme is March 31, 2021.
Last date to avail credit subsidy under PMAY scheme
The Pradhan Mantri Awas Yojana (PMAY) scheme offers credit-linked subsidies, subject to terms and conditions, on home loans to middle income groups (individuals earning between INR 600,000 to INR 1,800,000).
ITR forms announced for FY 2020-21 (Assessment Year 2021-22)
The government has notified updated income tax return filing forms for AY 2021-22. For example, ITR-1 asks for the quarterly breakup of dividend income, which became taxable in FY 2020-21. This information will be required for taxpayers claiming relief on the payment of advance tax under section 234C on dividend income.
In its press release, dated April 1, 2021, the Central Board of Direct Taxes stated: “Keeping in view the ongoing crisis due to COVID pandemic and to facilitate the taxpayers, no significant change have been made to the ITR Forms in comparison to the last year’s ITR Forms. Only the bare minimum changes necessitated due to amendments in the Income-tax Act, 1961 have been made.”
April 1, 2021
Choosing to transition to a different tax regime (i.e., the beneficial option between the old and new tax regimes)
The decision to choose a beneficial tax regime, either the old regime or the new one introduced in Budget 2020, for the financial year 2020-21 is required starting from April 1, 2021. Taxpayers can opt for the beneficial regime when filing their tax returns for FY 2020-21.
June 30, 2021
Last date to access tax incentive on purchase of new house
New home buyers can benefit from an income tax sop if their residential purchase is worth up to INR 20 million. The last date to avail this is June 30, 2021. According to tax experts, the government has increased the accepted differential between sale/purchase agreement value and circle rate from 10 percent to 20 percent for purpose of income tax calculation.
Last date to link Aadhaar and PAN
On March 31, the Central Board of Direct Taxes (CBDT) extended the deadline to link the two IDs until June 30, 2021, for a final extension. Thereafter, non-compliance will attract a penalty of up to INR 1,000.
July 1, 2021
The Finance Act, 2021 has amended rules relating to Tax Deducted at Sources/Tax Collected at Sources that will come into effect starting July 1. New rules mandate tax deduction or tax collection at a higher rate in case the income tax returns are not filed by certain specified persons. Key changes relate to purchase of goods, pension income, and accelerated TDS rates for non-filers; taxpayers will face higher TDS if the Aadhar is not linked with PAN.
To know more, read our article: New TDS/TCS Provisions in India from July 1, 2021
July 31, 2021
Deadline to file ITR for FY 2020-21
For individual taxpayers, the last date for filing their income tax returns for FY 2020-21 is July 31. This assessment year, taxpayers will have the option to choose between the existing tax regime or the new concessional tax regime. If the taxpayer opts for the new tax regime – they must file an additional form while filing their income tax return.
Other relevant deadlines
February 28, 2021: Deadline for submitting pension life certificates
The government has extended the deadline to submit the life certificate (which is mandatory for senior citizens if they wish to continue receiving pension) from November 30, 2020 to February 28, 2021 on account of delays due to the pandemic.
March 31, 2021: Last date to link the PAN Card with Aadhaar number
The government has extended the deadline to link two key identification numbers – the PAN and Aadhaar – from June 30, 2020 to March 31, 2021.
Failing to establish this linkage – the PAN will become invalid. The PAN number is mandatory for financial transactions. Aadhaar is a 12-digit identification number that includes the individual’s biometric information and is mandatory for all residents in India.
March 31, 2021: Last date to avail benefit under LTC Cash Voucher Scheme
The scheme was first announced in October 2020 for salaried employees to use their unclaimed Leave Travel Allowance (LTA) amount. The last date to avail this benefit is March 31. The scheme is now applicable to private sector employees, public sector undertaking employees, and central government employees.
To qualify, the employee must spend three times the amount deemed as LTA on goods and services that attract a goods and services tax (GST) of 12 percent or more.
December 31, 2021: Reduction in deadline period for belated filing of tax returns
Effective from filing the income tax return for FY 2020-21 onwards, taxpayers will now have time only till December 31, 2021 to file a belated ITR and pay a maximum penalty of INR 5,000. The deadline every year is July 31.
Previously, taxpayers would have time up till March 31, 2022 to file their returns and pay the penalty (which was INR 5,000 if filed by December 31 and INR 10,000 if filed by March 31 of the relevant assessment year). This reduction of three months was introduced in the Budget 2021.
However, the maximum penalty fee will not exceed INR 1,000 for taxpayers whose total income does not exceed INR 500,000 in a financial year.
This article was originally published on January 6, 2021. It was updated on June 28, 2021.
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