Direct Tax Updates
1. One time relaxation for verification of tax-returns:
CBDT In case of returns for Assessment Years 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 which were uploaded electronically by the taxpayer within the time allowed under section 139 of the Income-tax Act, 1961 (“Act”) and which have remained incomplete due to non-submission of ITR-V Form for verification, CBDT permits verification of such returns till 30th September 2020.
2. Clarification in relation to notifications issued under clause (v) of proviso to section 194N (TDS of payments of certain amounts in cash) of the Income-tax Act, 1961 (the Act) prior to its amendment by Finance Act, 2020 (FA, 2020)
Section 194N of the Act was amended by the Finance Act, 2020 (the FA, 2020) to provide that the clause (v) of the proviso to section 194N prior to its amendment has now become fourth proviso to the said section. Clarification has been provided that the notifications issued regarding exemption of persons or class of persons so that payments made to such persons or class of persons shall not be subjected to TDS issued under the clause (v) of the proviso to section 194N prior to its amendment shall be deemed to be issued under fourth proviso to section 194N as amended by the FA, 2020 and shall remain valid.
3. Circular for procedure to be followed by Sovereign Wealth Fund under section 10(23FE) of the Income-tax Act, 1961
Section 10(23FE) of the act provides for exemption to income of a specified person which includes notified Sovereign Wealth Fund (SWF) in the nature of dividend, interest or long-term capital gains arising from investment made by it in India if the investment is made in specified infrastructure during the period from 01.04.2020 to 31.03.2024, and held for at least three years.
The CBDT provides the compliances to be followed by SWS:
a. File application in the Form I in the Annexure to the circular to be filed as per the process mentioned in the circular
b. file return of income along with audit report
c. file a quarterly statement within one month from the end of the quarter electronically in Form II in respect of each investment made during the quarter in the Annexure to this circular.
4. Notified body or authority or Board or Trust or Commission for section 10 providing incomes not included in total income
The Central Government hereby notifies Boards whose certain specified income arising will not be included in total income as per section 10 subject to some conditions. Such Notified boards are:
a. Real Estate Regulatory Authority, conferred under subsection (1) of Section 20 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016) of
b. ‘Tamil Nadu e-Governance Agency’, an agency formed by the State Government of Tamil Nadu
c. National Aviation Security Fee Trust
5. Officers required to share information to facilitate identification of eligible beneficiaries
In pursuance of sub-clause (ii) of clause (a ) of sub-section (1) of Section 138 of the Income-tax Act, 1961, the Central Government hereby specifies following officer:
a. Joint Secretary (Farmers welfare), Department of Agriculture, Cooperation and Farmers Welfare, Ministry of Agriculture and Farmers Welfare, Government of India, for the purposes of sharing of information regarding income-tax assessees for identifying the eligible beneficiaries under PM-KISAN Yojanas.
b. Cabinet Secretariat
c. Intelligence Bureau
d. Narcotics Control Bureau
e. National Investigation Agency
f. Additional Secretary and Development Commissioner, Ministry of Micro Small and Medium Enterprises, Government of India
6. Corrigendum to notification regarding notified body or authority or Board or Trust or Commission for section 10 providing incomes not included in total income
The Central Government in the notification notified Boards whose certain specified income arising will not be included in total income as per section 10 subject to some conditions. Such Notified boards are:
1. Greater Noida Industrial Development Authority
2. Maharashtra Electricity Regulatory Commission, Mumbai
3. Real Estate Regulatory Authority conferred under subsection (1) of Section 20 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016) of
Amendment has been made to said notification providing additional years for which such notification shall be applicable. This includes AY 2013-2014, 2014-2015, 2015-2016, 2016-2017, 2017-2018, 2018-2019, 2019-2020 and 2020- 2021.
7. Income-tax (17th Amendment) Rules, 2020 for amending rules relating to TDS and TCS
The Central Board of Direct Taxes hereby makes the Income-tax (17th Amendment) Rules, 2020 to amend Rule 31AA (TCS Return), Rule 37BC, 37CA (Time for TCS Payment) etc. which provides for the statement of collection of tax and lower deduction certificate etc. Further Form 27EQ which is the form for furnishing Tax Collected at Source has also been substituted through the notification.
8. Income-tax (18th Amendment) Rules, 2020 relating to statement required by person responsible making payment of the income on behalf of an investment fund and the investment fund
The Central Board of Direct Taxes through the notification makes the Income-tax (18th Amendment) Rules, 2020 wherein Rule 12CB has been substituted which provides for the statement by the person responsible for crediting or making payment of the income on behalf of an investment fund and the investment fund to the person who is liable to tax in respect of such income giving details of the nature of the income paid or credited during the previous year under section 115UB. Further form Form No. 64C (Statement to unit holder) and 64D (Statement to Principal and Principal- Commissioner of Income Tax) have also been substituted.
9. Extension of Return filing due date for AY 2019-20
CBDT vide the notification has extended the due date for furnishing of return under section 139 thereof, for the assessment year AY 2019-20 to 30th September 2020
Further any self-assessment tax paid u/s 140A by a resident individual who does not have any income chargeable under the head “Profits and gains of business or profession and is of the age of sixty years or more at any time during the previous year shall be treated as advance tax .
10. Notification with respect to disclosures by Officers required to share information to facilitate identification of eligible beneficiaries
In pursuance of sub-clause (ii) of clause (a) of sub-section (I) of section 138 of the Income-tax Act, 1961, the Central Government provides the officers to:
11. National Pension Scheme Tier II- Tax Saver Scheme, 2020
The Central Government through this notification introduced National Pension Scheme Tier II- Tax Saver Scheme, 2020 whereby the assessee, being a Central Government employee, shall make contribution to the specified account minimum amount being INR 1,000/- which has been activated by the Pension Fund Regulatory and Development Authority in accordance with the provisions of this scheme for a lock in period of 3 years
12. Notified business for section 10(23FE) providing incomes not included in total income
The Central Government hereby notifies business which is engaged in the infrastructure sub-sectors mentioned in Updated Harmonised Master List of Infrastructure Sub-sectors, whose income in the nature of dividend, interest or long-term capital gains arising from an investment made by it in India, whether in the form of debt or share capital or unit arising will not be included in total income as per section 10 subject to some conditions.
13. Income-tax (16th Amendment) Rules, 2020 to amend rule 31A
Vide Notification No. 43/2020, the CBDT has made amendment to Rule 31A which provided for statement of deduction of tax u/s 200(3) in Forms 24Q, 26Q and 27Q. Changes have been made to incorporate section 194N and 194-O which shall come into effect from 1st July 2020 and 1st October 2020 respectively.