Company Taxation

Recent Changes

The Central Board of Direct Tax (CBDT), in the recent past, had announced a series of measures including the extension of due-dates for various compliances to be done under the Act, a reduction in the rate of interest for delay in compliance, issuance of refunds up to INR 500,000 as well as providing clarifications on the residential status of individuals who are stranded in India because of the pandemic. The major relaxations are highlighted below:

  • 1. The Finance Act, 2020, had amended provisions relating to residential status whereby the period of stay in India had been reduced from 182 days to 120 days for certain categories of individuals. The CBDT has clarified that for FY 2019-20, the number of days of stay of an individual in India from 22 March 2020 till the time they are unable to leave India shall be ignored. Furthermore, it has also been clarified that for FY 2020-21, a separate circular shall be issued for determining the residential status of individuals who are stranded in India - and the circular is expected to be issued when normalcy is restored.
  • 2. It has been conveyed that no coercive action will be taken during this period of lockdown, including the issuance of notices for scrutiny assessments
  • 3. To provide some relief to the businesses and to provide liquidity, the following additional measures were announced: -
    • a. Reduction in TDS/TCS rates to provide liquidity to businesses
      With the intention to provide more funds at the disposal of the taxpayers, the Finance Minister (FM) announced a move wherein the TDS rates for all non-salaried payments to residents, and TCS rates are reduced by 25% of the existing specified rates. This reduction in the rates shall be in operation from 14 May 2020 to 31 March 2021.

      Note : The above reduction in rates shall not be applicable in the following scenarios: -

      • Where tax is deductible from payments made under the head ‘salary’ as per provisions of Section 192 of the Income Tax Act, 1961 (the Act).
      • Where payment is made to a non-resident, not being a company or to a foreign company
      • Where tax is deductible @ 20% on payments made to a person resident in India where he fails to furnish his PAN or Aadhar Card
      • Where a lower deduction certificate has been obtained under Section 197 of the Act
      • TDS on cash withdrawals under Section 194N and TCS on alcoholic liquor for human consumption, TCS on foreign tours, and TCS on remittances under the Liberalised Remittance Scheme.
    • b. Further extension of due dates for various compliances under the Income Tax Act, 1961Realizing the fact that businesses and the economy may not recover completely and keeping in mind that in some parts of the nation, the lockdown has been extended, the FM had granted some relaxation by extending the due dates of compliances. The FM has further extended the due dates as per table given below.
    • c. The time limit for making investments, which are eligible for deduction under Chapter VI-A or claiming exemptions under Section 54 to 54GB, have been extended till 31 July 2020
    • d. The due date for making the payment of self assessment tax is 30 November 2020, if the liability does not exceed INR 100,000 and the same is paid by 30 November 2020. In other cases, interest under Section 234A will be applicable.
Particulars Due date prescribed under the relevant Act/As per Ordinance Extended Due date
Extension of time limit for making payment under the Vivad se Vishwas Scheme without the requirement of making 10% additional payment 31 March 2020 / 30 June 2020 31 December 2020
Filing of return of income for AY 2020-21 31 July 2020 or 31 October 2020 30 November 2020
Furnishing of Tax Audit Report under Section 44AB 30 September 2020 31 October 2020
Time limit for completion of assessment proceedings for AY 2018-19 30 September 2020 31 December 2020
Time limit for completion of assessment proceedings, which are becoming time-barred on 31 March 2021 31 March 2021 30 September 2021
Filing of original or revised returns for AY 2019-20 31 March 2020/ 30 June 2020 31 July 2020
Filing of Appeal under the Act 30 June 2020 31 March 2021
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Maulik Doshi
Senior Executive Director
Transfer Pricing and Transaction Advisory Services

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