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Advance tax payments

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Know Even Salaried, Pensioner and Self Employed are liable for Advance Tax payment which is due on 15 March 2023

Know Even Salaried, Pensioner and Self Employed are liable for Advance Tax payment which is due on 15 March 2023

Advance Tax Liability is not just for Corporates/ businesses, it’s also very much applicable for salaried, pensioners, self-employed individuals, freelancers and professionals!!

Even in the case of Salaried / pensioner Advance Tax is the applicable estimated tax liability of more than Rs. 10,000 for a financial year, and the total income tax liability for the year is not expected to be fully covered by Tax Deducted at Source (TDS) in following cases

– The person Change Job and does not disclose previous Income at New Job

– Has salary income without TDS deducted by the employer

– Has income from interest, rent and other source

– Has income from Capital Gains

– Has any other Taxable Income and TDS is not sufficient to cover the overall Tax Liability

Advance tax is applicable for self-employed individuals in India if their estimated tax liability for the financial year is more than Rs. 10,000. Self-employed individuals, such as freelancers, professionals, and businessmen, often have income from sources other than salary, such as business income, consultancy fees, or freelance payments, which are not subject to TDS (Tax Deducted at Source). As a result, they are required to pay advance tax in order to fulfill their tax liability for the year.

Self-employed individuals are required to estimate their total income for the year and calculate the tax liability on it. If the estimated tax liability is more than Rs. 10,000, then they are required to pay advance tax in installments during the financial year. The due dates for payment of advance tax for self-employed individuals are June 15th, September 15th, December 15th, and March 15th.

It is important for self-employed individuals to accurately estimate their tax liability and pay advance tax on time to avoid interest and penalties as per the Income Tax Act.

Presumptive income for businesses–The taxpayers who have opted for the presumptive taxation scheme under section 44AD have to pay the whole amount of their advance tax in one instalment on or before 15 March. They also have the option to pay all of their tax dues by 31 March.

Presumptive income for professionals– Independent professionals such as doctors, lawyers, architects, etc. come under the presumptive scheme under section 44ADA. They have to pay the whole of their advance tax liability in one instalment on or before 15 March. They can also pay the entire amount by 31 March.

if a taxpayer fails to pay their income tax on or before the due date, they may be liable to pay interest under Section 220(2) of the Income Tax Act. The interest is calculated from the due date of payment until the actual date of payment, at a rate of 1% per month or part of the month for the period of delay.

The interest is calculated on the amount of tax that remains unpaid, including any advance tax, self-assessment tax, or regular tax that has been assessed but not paid by the due date. The interest is calculated separately for each assessment year and is calculated on a simple interest basis.

It is important for taxpayers to pay their advance income tax on time to avoid interest charges and penalties under the Income Tax Act.

Taxpayers can consult a tax professional to estimate their tax liability and plan their tax payments accordingly to avoid any interest charges and penalties

Penny Wise Pound Foolish Taxpayers – Many times advance tax is skipped by taxpayers and they land up paying huge interest while filing Income Tax Returns, which could be saved by hiring a professional to calculate correct tax liability. Just to save professional fees they end up paying 10 times more interest amount !!

Source

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Know Step to Pay Advance Tax and way to Calculate Tax Liability, last date 15 December 2021

Know Step to Pay Advance Tax and way to Calculate Tax Liability, last date 15 December 2021

The due date for Advance Tax Payment 3rd Installment is 15 December 2021. Taxpayers need to know that as per section 208, every person whose estimated tax liability for the year is Rs. 10,000 or more, shall pay his tax in advance, in the form of “advance tax”. In this part you can gain knowledge on various provisions relating to payment of advance tax by a taxpayer.

Who is Liable to pay Advance Tax?

Every person whose estimated tax liability for the year is Rs. 10,000 or more is liable to pay advance tax be it Individual, Compnay, LLP, Partnership Firm, Trust who has tax liability or any other entity

Are Senior Citizen Liable to pay Advance Tax?

A resident senior citizen (i.e., an individual of the age of 60 years or above during the relevant financial year) not having any income from business or profession is not liable to pay advance tax.

So If Senior Citizen is Non Resident and having business or professional as income, he has to compute advance tax liability and pay

Further Taxpayers who opted for presumptive taxation scheme of section 44AD or section 44ADA need not pay first three installment, but have to pay 100% of tax in last installment of 15 March

What are due dates to Pay Advance Tax ?

Advance tax is to be paid in different installments. The due dates for payment of different installments of advance tax are as follows:

All assessees (other than the eligible assessee as referred to in Section 44AD or section 44ADA)Minimum 15% of advance taxMinimum 45% of advance taxMinimum 75% of advance taxMinimum 100% of advance tax
Taxpayers who opted for presumptive taxation scheme of section 44AD or section 44ADANilNilNilMinimum 100% of Advance tax

Know Step to Pay Advance Tax and way to Calculate Tax Liability, last date 15 December 2021
Know Step to Pay Advance Tax and way to Calculate Tax Liability, last date 15 December 2021

Please Note : 1) Any tax paid till 31st March will be treated as advance tax.
Note 2)If the last day for payment of any instalment of advance tax is a day on which the banks are closed, then the taxpayer should pay the advance tax on the immediately following working day [Circular No. 676, dated 14-1-1994]

What are modes to pay Advance Tax?

A corporate taxpayer (i.e., a company) shall pay taxes through the electronic payment mode using the internet banking facility of the authorised banks. Taxpayers other than a company, who are required to get their accounts audited, shall pay taxes through the electronic payment mode using the internet banking facility of the authorised banks.
Any other taxpayer can pay tax either by electronic mode or by physical mode i.e. by depositing the challan at the receiving bank.

How to Calculate the Income for purpose of Advance Tax?

Advance tax can be paid by the taxpayer either on his own account or in pursuance of an order of the Assessing Officer. The taxpayer who is liable to pay advance tax is required to estimate his current income and pay advance tax on his own account. In such a case, he is not required to submit any estimate or statement of income to the tax authorities.


After making payment of first or second or third instalment of advance tax (as the case may be), if there is a change in the tax liability, then the taxpayer can revise the quantum of advance tax in the remaining instalment(s) and pay the tax as per revised estimates.


Tax can be computed on the current income (estimated by the taxpayer) at the rates in force during the financial year. Following are the steps to be followed to compute total income

(1) Compute your Gross Total Income (GTI), taking into account incomes under various heads: Salary, Business & Profession; House Property; Capital Gain; and Other Sources which are main heads of income in Income Tax

(2) From the GTI you may claim for deductions such as Section 80C, 80D, 80G, 80E, 80EE, etc., as the case may be, under chapter VI-A of the Income Tax Act, 1961. This would get you to the Net Taxable Income (GTI minus Deductions under chapter VI, including donation to political party or trust.

(3) Thereafter, apply the tax rates as per the tax slab applicable to calculate your total tax dues. And from the tax dues, do not forget to subtract the tax deducted at source (TDS) which has been already deducted. This information you can also get from 26AS Statement online

(4) The final amount you derive needs to be paid as Advance Tax, based on the percentage as mention in the above table and picture

What happens if you don’t pay Advance Tax?

Non-payment of Advance Tax will attract penal interest as per the provisions of Section 234B and Section 234C. The interest is 1% simple interest per month calculated on the amount of ‘unpaid Advance Tax’ which is Assessed Tax less the Advance Tax paid if any.  However, if a person has cleared 100% of his/her dues by 15th March, then he/she would not have to pay any tax at the time of filing ITR. As the Income Tax Department would adjust the advance tax paid by you against the total tax liability. In case of difference between tax liability and tax paid, the taxpayer would have to pay the balance amount along with interest.

How to Pay Advance Tax online for FY 2021-22 and FY 2022-23?

While paying Advance Tax, you don’t have to submit an estimate or statement of income to the tax authorities. You have to fill Challan No/ITNS 280, which can be done online or through any nearest bank. The advance tax for FY 2021-22 for the third instalment is 15th dec  2021.

Following are the steps for payment of Advance tax for individual taxpayers:

Go to site https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

•     Select challan no CHALLAN NO./ITNS 280

•      In that form select (0021) Income Tax (Other than Companies) 

•      Enter your PAN number and Select Assessment year as AY 2022-23

•      Enter your address and amount of tax i.e Rs. XXXX

•      Select type of payment as (100) ADVANCE TAX

•      Select your bank it will ake you to your bank page and you can enter your login ID and password and pay in tax column total tax to be paid i.e Rs. XXXXX

•      Once paid you will be redirected to the BSR Code and challan details

•       Download/ Save the Challan Copy and email the challan copy 

In case Advance Tax paid by the Assessee is more than his actual Income Tax Liability, he can claim Refund of Income Tax by furnishing the details of tax deposited in the Income Tax Return.

To help taxpayers properly compute their Advance Tax liability and the interest applicable thereon, the Income Tax Dept has also prepared an online advance tax calculator which can be accessed through this link – http://www.incometaxindia.gov.in/pages/tools/advance-tax-calculator.aspx

In case you want professional help to calculate you can consult by clicking here

How to check advance tax payment status?

To check the status of your advance tax payment challan, go to https://tin.tin.nsdl.com/oltas/index.html. Select CIN (Challan Identification Number) Based View. Then enter the required details being asked for, in order to view the status. You can also check the list of advance tax payments made by logging in to your income tax account at https://www.incometaxindiaefiling.gov.in/home and going to My account -> View Form 26AS (Tax Credit), and entering the financial year and type of view/download.

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Know if you are liable to Pay Advance Tax before 15 March

Know if you are liable to Pay Advance Tax before 15 March 

Every individual has certain responsibilities under different laws and when it comes to the Income Tax Act. One of the primary responsibilities is to pay the required tax on the income earned during the year. There are various ways in which the tax will be paid and this covers self-assessment tax, tax deducted at source, advance tax and tax on assessment. Advance tax is the tax that is paid in advance for the income of a particular financial year. The normal expectation is that tax has to be paid only when the income is earned but under the tax provisions the tax payer has to actually estimate the income for the entire year and based on this pay advance tax at specific time intervals.

When shall a person be liable to pay advance tax?

  • A Person Shall be liable to pay advance tax only if Tax Liability exceeds Rs. 10,000 i.e., a person shall be exempt from payment of Advance Tax If Tax Liability does not exceed Rs. 10,000.
  • The Education Cess and Secondary Higher Education cess shall also be considered for the purpose of calculating the Tax Liability.
  • A Senior Citizen who does not have Income under head Business or Profession shall be exempt from the Payment of Advance Tax.
  • Taxpayers opting for the presumptive taxation scheme of section 44AD are also liable to pay advance tax in respect of business covered under section 44AD.

What are the due dates of payment of advance tax?

Due DateAdvance Tax Payable
On or before 15th June15% of advance tax
On or before 15th September45% of advance tax less advance tax already paid
On or before 15th December75% of advance tax less advance tax already paid
On or before 15th March100% of advance tax less advance tax already paid

Therefore, by 15th March, 2021, taxpayers are liable to pay minimum 100% of advance tax in a single instalment.

Interest on default in paying advance tax

Interest under section 234B is applicable when:

Tax liability after reducing TDS for the financial year is more than Rs 10,000 and one does not pay any advance tax.

or

One has paid advance tax, but advance tax paid is less than 90% of ‘assessed tax’.

In any one of the above cases, interest under section 234B shall be applicable. Interest is calculated @ 1% on Assessed Tax less Advance Tax. Part of a month is rounded off to a full month. The amount on which interest is calculated is also rounded off in such a way that any fraction of a hundred is ignored.

Interest under section 234C is applicable when:

The interest for late payment is set at 1% on the amount of tax due. It is calculated from the individual cut off dates, till the date of actual payment of outstanding taxes. Computation of interest under Section 234C is as follows:

 Rate of InterestPeriod of InterestAmount on which interest is calculated
If Advance Tax paid on or before June 15 is less than 15% of the AmountSimple interest @1% per month3 months15% of Amount (-) tax already deposited before June 15
If Advance Tax paid on or before September 15 is less than 45% of the AmountSimple interest @1% per month3 months45% of Amount (-) tax already deposited before September 15
If Advance Tax paid on or before December 15 is less than 75% of the AmountSimple interest @1% per month3 months75% of Amount (-) tax already deposited before December 15
If Advance Tax paid on or before March 15 is less than 100% of the AmountSimple interest @1% per month 100% of Amount (-) tax already deposited before March 15

How can advance tax be paid?

Advance tax can be paid online as well as offline.

To Pay online:

Step 1 – Login to the income tax website www.incometaxindia.com

Step 2 – Click on e-payment of Taxes tab

Step 3 – Now under the Service tab, select e-payment option

Step 4 – To pay advance tax, select Challan 280

Step 5 – Fill in the required details

Step 6 – Choose Net banking option to pay online

Step 7 – After successful payment, a challan certificate will be displayed which will contain the information number, payment details and bank name via which e-payment was made. This certificate is proof of the payment that has been done

To Pay Offline:

You have to visit the designated bank branch and fill the challan form and then pay the taxes

The tax department had been issuing notices to the defaulting taxpayers and also seeming to take strict actions against them. The income tax department will be levying a hefty penalty on all the defaulters in case they don’t pay the taxes on time. The due date for the deposition of advance tax is 15th March and the same is fast approaching. Taxpayers are now seeking CA help to check out the tax liability on them. If in case the taxpayer misses the deadline, he may have to shell out the hefty penalty on the missing deadline.

Click below to know stepwise process to pay Advance Tax online

Stepwise process to pay Advance Tax online on or before 15th March 2021
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Stepwise process to pay Advance Tax online on or before 15th March 2021

Stepwise process to pay Advance Tax online on or before 15th March 2021

Advance tax is tax paid in advance for the Income earned during the financial year. Advance tax is also known as ‘Pay as you earn’ scheme. The tax should be paid in the same year in which the income was received. These payments have to be made in instalments as per due dates provided by the income tax department.

Who is liable for payment of advance tax?

  • Assessee shall be liable to pay advance tax only where the total tax Liability for the Previous Year exceeds Rs. 10,000 i.e., assessee is exempt from payment of Advance Tax if Tax Liability does not exceed Rs. 10,000.
  • A Senior Citizen who have Income under head Business or Profession shall be exempt from the Payment of Advance Tax.
  • Taxpayers opting for the presumptive taxation scheme of section 44AD are also liable to pay advance tax in respect of business covered under section 44AD.

What are the due dates of payment of advance tax?

Due DateAdvance Tax Payable
On or before 15th June15% of advance tax
On or before 15th September45% of advance tax less advance tax already paid
On or before 15th December75% of advance tax less advance tax already paid
On or before 15th March100% of advance tax less advance tax already paid

Therefore, by 15th March, 2021, taxpayers are liable to pay minimum 100% of advance tax in a single instalment.

Steps for online payment of Advance tax:

Below are the steps for online payment of Advance tax:

Step 1: Go to site https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

Now, Select challan no CHALLAN NO./ITNS 280

Step 2: Now fill the below details:

a. Select (0020) Corporation Tax (Companies) in case of company and (0021) Income Tax (Other than Companies) in case of person other than company

b. Select type of payment as (100) ADVANCE TAX

c. Select mode of payment i.e. Net- Banking or Debit Card and select the Assessment year i.e. 2021-22

d. Enter your PAN number and Select Assessment year as AY 2021-22

e. Enter your address, mail ID and mobile no

Enter the Captcha code and Click on “Proceed” button. In the next page it will display the name as per PAN card and Financial year for the respective Bank assessment year selected

Step 3: Payment of tax:

Now in next page “Click on “Submit to Bank” button 

You will be redirected to your bank page. Now, enter your Internet bank login ID and password in next page enter the tax amount in Basic tax Column

Once paid you will be redirected to the BSR Code and challan details. Download/ Save the Challan Copy

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Advance tax instalment for dividend income

Advance tax instalment for dividend income

Section 234C of the Act provides for payment of interest by an assessee who does not pay or fails to pay on time the advance tax instalments as per section 208 of the Act. The assessee is liable to pay a simple interest at the rate of 1% per month for a period of three months on the amount of shortfall calculated with respect to the due dates for advance tax instalments.

The first proviso of the sub section (1) provides for the relaxation that if the shortfall in the advance tax instalment or the failure to pay the same on time is on account of the income listed therein, no interest under section 234C shall be charged provided the assessee has paid full tax in subsequent advance tax instalments. These exclusions are: –

  • (a) the amount of capital gains; or
  • (b) income of the nature referred to in sub-clause (ix) of clause (24) of section 2;
    or
  • (c) income under the head “Profits and gains of business or profession” in cases where the income accrues or arises under the said head for the first time; or
  • (d) income of the nature referred to in sub-section (1) of section 115BBDA.

Aforesaid relaxation is to insulate the taxpayers from payment of interest under section 234C of the Act in cases where accurate determination of advance tax liability is not possible due to the intrinsic nature of the income. Therefore, after considering various representations favourably, it is proposed to include dividend income in the above exclusion but not deemed dividend as per sub-clause (e) of clause (22) of section 2 of the Act.

This amendment will take effect from 1st April, 2021 and will accordingly apply to the assessment year 2021-22 and subsequent assessment years.

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ICAI Request Further Extension of ITR and Tax Audit to 31 March 2021

ICAI Request Further Extension of ITR and Tax Audit to 31 March 2021

The Direct Tax Committee of the Institute of Chartered Accountants of India has further requested the Ministry of Finance to extend the due dates for various Income Tax Returns from 10 Jan 2021 to 31 March 2021 and Tax Audit Reports from 15 Jan 2021 to 31st March 2021.

The Representation made is reproduce below

6th January 2021

To Chairman, Central Board of Direct Taxes, Ministry of Finance, Government of India, North Block, New Delhi–110 001.

Sir, Re: Request to consider further extension(s) of various due dates under Income-tax Act, 1961 especially Tax Audit Reports and related returns and Income Tax Return Forms for AY 2020-21

We refer to our earlier representation (ICAI/DTC/2020-21/Rep – 26 dated 13.12.2020) submitted to your good office detailing therein issues/concerns being faced by taxpayers/members due to ongoing COVID19 pandemic and the resultant need to further extend the due dates of filing ITR Forms and Tax Audit report and other related returns/reports for AY 2020-21.

Considering the problems being faced by the taxpayers, government has provided further time to the taxpayers for furnishing of Income Tax Returns, tax audit reports etc. vide Notification No. 93/2020 dated 31.12.2020. We duly appreciate the same. However, we wish to inform that the said extended time of 10 days for furnishing of ITR Form for AY 2020-21 for certain specified assessees and 15 days for furnishing of tax audit reports and related returns is not at all sufficient.

Issues & Concerns – Case for further extension of due dates of ITR and TAR filing

You may well appreciate that this year is an exceptional year due to Covid-19 pandemic. Further, despite recent approval by concerned regulatory authorities of vaccines for emergency use to cure this dreaded disease, it is still not good enough and risk in general is not yet over. United Kingdom has just imposed a 6-week lockdown as a mutated and already several positive cases of people in India of the said UK Covid virus has been reported.

Being unprecedented circumstances due to Covid-19 and an exceptional year, the inconvenience caused to the taxpayers in particular is immeasurable. Several hardships and difficulties, both operational and financial, are still being faced making it difficult for both taxpayers and professionals to meet the extended deadline of furnishing of ITR Forms and TAR for AY 2020-21 within a week or so from now.

The extension of 10-15 days does not appear to be a really very supportive stance to deal with such a large-scale pandemic situation. Last but not the least, we cannot forget the apathy being faced by the taxpayers and professionals of North India, especially the people of NCR of Delhi due to on-going agitation by farmers (Kissan Andolan) for last nearly 40 days. You may also consider the situation from the point of view of senior tax professionals and assessees above the age of 65 years, who are more prone to the deadly diseases.

Also, it may not be out of place to mention that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 had extended the due dates for delivering Statements of TDS and TCS of 1st and 2nd quarters of FY 2020-21 to 31.03.2021, however, the due date for 3rd quarter of FY 2020-21 remains 15.01.2021 for TCS and 31.01.2021 for TDS under the law, which has not been extended. These dates also need to be extended to 31.03.2021 for harmonious compliances in this regard.

Suggestion(s)

In the interest of the Nation as a whole, it is once again humbly requested that the due dates u/s 139(1) of the Income-tax Act, 1961 for furnishing return of income as well as the specified date u/s 44AB of the Act for furnishing tax audit report and related returns for AY 2020-21 be further suitably extended to say 31.03.2021 considering the fact that current extension of 10/15 days is not at all-sufficient. Further, all the other due dates of compliances under Income-tax Act, 1961 (TDS/TCS/Section 11(1A)/54/54F/Advance tax payments etc.) be also suitably extended to say 31.03.2021 to enable assessees to meet such deadlines without incurring any other extra cost.

Also, the due date for 3rd quarter of FY 2020-21 is 15.01.2021 for TCS returns and 31.01.2021 for TDS returns which may also be extended to 31.03.2021. We hope that our suggestions would be favourably considered. We would be happy to deliberate on the matter albeit virtually if considered necessary by your good office.

With Warm Regards

Chairman, Direct Taxes Committee

The Institute of Chartered Accountants of India

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ICAI Request CBDT for extension of Tax Audit and ITR due dates to 31 March 2021

ICAI Request CBDT for extension of Tax Audit and ITR due dates to 31 March 2021

Request(s) for extension of various due dates under Income-tax Act, 1961

  • Tax Audit Reports and related returns
  • Income Tax Return Forms for AY 2020-21
  • Section 11(1A) of the Income-tax Act, 1961 due date
  • TDS/TCS compliances
  • Section 54/54F of the Income-tax Act, 1961
  • Advance tax payments

We wish to bring to your kind notice the issues/concerns being faced by taxpayers/members due to ongoing COVID19 pandemic and the resultant need to further extend the due date of filing ITR Forms and Tax Audit report and other related returns/reports for AY 2020-21.

Introduction/Background

The Finance Act 2020 amended section 139(1) of the Income-tax Act, 1961 to provide that the due date to file ITR Forms for specified assesses is 31.10.2020 for AY 2020-21. Further, the due date to file Tax Audit Report (TAR) u/s 44AB of the Income-tax Act, 1961 was made one month prior i.e. 30.09.2020 for the AY 2020-21. However, due to ongoing COVID19 pandemic, the said due dates for filing ITR forms and TAR for AY 2020-21 have been proactively extended to 31.01.2021 and 31.12.2020 respectively.

We refer to our earlier representation  ICAI/DTC/2020-21/Rep  –  21  dated  16th  October,  2020 submited to your good office wherein it was requested to suitably extend all the due dates of various compliances under Income-tax Act, 1961 for the current financial year and specifically the due date of filing return of income u/s 139(1) of the Income-tax Act, 1961 and the ‘specified date’ for filing tax audit reports for AY 2020-21.

The said representation referred to the prevailing situation in various States and continuing & frequent lockdowns making the tasks of filing returns etc. and availing services of professionals practically impossible. In this regard, we will also refer to our earlier representation(s) i.e. ICAI/DTC/2020-21/Rep – 20 dated 25.09.2020), ICAI/DTC/2020-21/Rep – 14 dated 25th July, 2020 and ICAI/DTC/2020- 21/Rep – 11 dated 25.06.2020 which were favourably considered regarding extension of various due dates.

Issues & Concerns

In the mater of audits including tax audits, the ICAI has onerous responsibility to maintain and enhance quality of reports. The Government is well aware that the Institute has the responsibility of ensuring and enhancing the quality of services provided by its members to clients and other stakeholders. In fact, the prime objective of tax audit is to assist the assessing officer to determine income from business or profession. It is also necessary to emphasize for your kind appreciation that in the context of audit requirements, the Chartered Accountants are also the stakeholders.

As you are kindly aware that the effects of COVID19 pandemic is not yet over and is affecting all spheres of life even now. Taxpayers are equally affected. More recently, some metros like Delhi are seeing surge in Covid positive cases and there is a talk of third wave. The number  of COVID positive cases are still not under the control across the country forcing many of the States for compulsory fixing of working hours and also weekend lock downs, night curfews, restrictions of movements of people and disruption of transport systems, entries and exits in many states. As a result, corporates and professionals are unable to complete the tasks virtually working from home as at present.

Further, it is pertinent to mention here that at majority of assessees establishments, their staff like Accountants are not available and accordingly data for preparation of tax audit reports are not received in time making it difficult to meet the statutory timeline. In the City of Mumbai, the financial capital of the country, till date the main lifeline, the local trains are not open for the general public making it very difficult for travel by the staff of taxpayers as well as the professionals. Such metro cities have huge financial relationship with other small cities.

If any office is Financial Capital or Capital of India is not working, other vendors and customer related to them are also affected. They will also not get required statements or confirmations which are of utmost importance for completion of any audit. Bankers are also not providing statement citing that it is at head office or regional office which are situated in Metro’s like Pune, Mumbai, Chennai., etc. Even smaller cities are facing problems relating to staff as most of the staff have left for native places and are yet to return back to work.

In cities like Mumbai, the main mode of communication is Local trains, which have not yet started for general public which includes employees & other staff. So, without the working staff, especially for offices located

in far off areas and unavailability of adequate staff, our members are finding it difficult to complete the onerous task of completing tax audits on or before 31.12.2020.

We wish to inform that the ICAI is still receiving concerns of taxpayers w.r.t. issues being faced arising from ongoing COVID19 pandemic. In this tough current environment, it is still very difficult for assessees to meet income-tax compliances as they need to first concentrate on geting their operations on track.  Certain states are still facing partial lock-down(s) with  no public transport for common workers and employees to travel to and fro office. This has paralysed, albeit partially but substantially, functioning of Government offices including income tax.

Most of the business establishments are still finding it difficult to operate at full capacity. As per a recent report, most of the employees are still working from home instead of commuting to office. In fact, the public transport is still not fully operational in big cities like Mumbai, Bengaluru, Hyderabad, Ahmedabad, Rajkot etc. People cannot get to their places of work without the public transport being available.

Add to that recent farmers protest especially at the capital making commuting even more difficult. There is also a shortage of manpower which is paralysing the continuity of work. All such issues are making it virtually impossible for most of our members and the taxpayers to adhere to the revised due dates of 31.12.2020. Many of our members in practice are senior citizens for whom it is inadvisable to move out, for they are found more susceptible to the pandemic.

There is a genuine case for extension of due dates of ITR and TAR in the whole of India although problems in metro cities like Mumbai and Delhi are more visible.

During the month of December, there are many other compliances to be made like payment of Advance tax, filing of relevant GST returns, GST Annual Returns over & above audit & tax returns. Further, especially in the current year, Capital Gains transactions have to be reported in great details which is a very time-consuming activity.

It is pertinent to mention here that if someone in the office/client/client staff were to suffer an account of Covid, then the office has to be closed at least for 3 to 5 days, to make it Covid free by cleaning & disinfecting.

Similarly, if the partner/proprietor were to get affected by Covid then atleast for 15 to 21 days, he can’t atend the office nor can he sign any reports.

The relaxation in due dates would ease the compliance burden of assessees in these tough times and would enable him to concentrate on operational aspects of his business. Currently, working for longer hours is not feasible. Assessees  and  professionals  are  under  tremendous mental pressure and stress as they are worried about the infection that may  catch at any moment due to various reasons.

As you may be kindly aware that CBDT has made changes in Form No. 3CD vide Notification No. 82/2020 dated 01.10.2020 which necessitates revision of utility and accordingly requires re-working of depreciation and other linked losses due to adoption of alternative methods of tax scheme, which requires certification thereby increasing the compliance burden of the assessees concerned. The online java utility for the same is updated in November, 2020 only.

Further, changes in the ITR Form 6 has also been made in the month of October and now again revised in December, 2020 making it difficult for assessees to understand changes at the last moment and then report correctly. It is also a fact that the Judiciary in the past advised CBDT to refrain from making changes at the eleventh hour making it difficult for assessees to comply in time.

As you may be kindly aware that other authorities like MCA have already extended the due dates of compliances under Companies Act, 2013 suitably to ease compliance burden of concerned and is also in the process to extend the due dates further.

It may also be considered that announcement of extension at the eleventh hour does not help the law abiding assessees and to an extent helps those who do not care for compliance and in fact, emboldens them.

Under the circumstances, the adherence to the extended due dates may not be possible. Majority of the assessees would be unable to meet the extended time-line(s) w.r.t various compliances under the Income-tax law.

Apart from the major issues arising due to COVID19 pandemic hampering compliances regarding filing of ITR forms and Tax audit reports, certain concerns like delay in release of online e-filing utilities & continuous and regular updation in the Schemas of the ITR/TAR Form filing utility and detailed information to be provided in notified ITR forms requires time, needs to be kept in mind for considering the due dates extension.

It may also be mentioned that section 11(1A) of the Income-tax Act, 1961 was not given any extension of timeline in the Ordinance and Amendment Act passed thereafter. Certain Trust(s) could not make investment/ acquire assets which they should have done before 31.03.2020. Accordingly, extension of time may be provided in this regard as well.

Suggestion(s):

In view of the above and in the interest of the Nation as a whole, it is once again humbly requested that the due date of filing return of income u/s 139(1) for all the assessees be suitably extended, to say at least till 31.03.2021, from the current extended due date of 31.12.2020 for AY 2020-21. Simultaneously, the ‘specified date’ for filing tax audit reports  be extended from 31.12.2020 to say 31.03.2021 as well for AY  2020-21. As statutorily, it may not be possible to have same due dates to file ITR and TAR, then suitable amendment may be made in section 139 for the same.

Further, all the other due dates of compliances under Income-tax Act, 1961 (TDS/TCS/Section 11(1A)/54/54F/Advance tax payments etc.) be suitably extended to say 31.03.2021 to enable assessees to meet such deadlines without incurring any other extra cost.

We hope that our suggestions would be favourably considered. We would be happy to deliberate on the mater albeit virtually, if considered necessary by your good office.

With Warm Regards

Direct Taxes Committee

The Institute of Chartered Accountants of India

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