There are changes /updated by Ministry of finance in certain provision and rule of income tax due to consideration of COVID-19 which is being shared for the benefits of everyone at all in one place.
1. The CBDT has modified the norms for Mutual Agreement Procedures (MAP) by prescribing two years as the average time-frame for resolving cases. What is Agreement Procedures? MAP is aimed at bringing in certainty via an alternative dispute resolution mechanism.
2. Clarification in respect of residency under section 6 of the Income-tax Act, 1961
CBDT vide Circular No.11 /2020-Income Tax dated 08th May, 2020 Various representations have been received stating that there are number of individuals who had come on a visit to India during the previous year 2019-20 for a particular duration and intended to leave India before the end of the previous year for maintaining their status as non-resident or not ordinary resident in India. However, due to declaration of the lockdown and suspension of international flights owing to outbreak of Novel Corona Virus (COVID-19), they are required to prolong their stay in India. Concerns have been expressed that this extra stay in India may make them a resident of India under section 6 of the Act. In order to avoid genuine hardship in such cases, the Board, in exercise of powers conferred under section 119 of the Act, has decided that for the purpose of determining the residential status under section 6 of the Act during the previous year 2019-20 in respect of an individual who has come to India on a visit before 22nd March, 2020 and:
(a) has been unable to leave India on or before 31st March, 2020, his period of stay in India from 22nd March, 2020 to 31st March, 2020 shall not be taken into account; or
(b) has been quarantined in India on account of Novel Corona Virus (Covid-19) on or after 1st March, 2020 and has departed on an evacuation flight on or before 31st March, 2020 or has been unable to leave India on or before 31st March, 2020, his period of stay from the beginning of his quarantine to his date of departure or 31st March, 2020, as the case may be, shall not be taken into account; or
(c) has departed on an evacuation flight on or before 31st March, 2020, his period of stay in India from 22nd March, 2020 to his date of departure shall not be taken into account.
3. Donations to Shri Ram Janmabhoomi Teerth Kshetra eligible for exemption from income tax
Notification No. 24/2020-Income Tax Dated 08-05-2020, the government has exempted donations made to the Shri Ram Janmabhoomi Teerth Kshetra, from income tax u/s 80 G(2)(b) for the financial year 2020-21
4. CBDT has deferred the implementation of new procedure for approval/registration/notification of certain entities u/s 10(23C),12AA, 35 & 80G of IT Act,1961 to 1st October,2020. CBDT has also issued a press note whereby it has extended the period of the requirement of fresh registration imposed by the Finance Act,2020 on all existing Charitable and Religious Trust. As per the amendment made all existing trust are required to apply for fresh registration within a period of three months starting from 1st June,2020. By this press note this is being extended to 1st October,2020 to 31st December,2020.
5. The government in a press conference dated May 13, 2020 announced that
- The income tax return(ITR) filing deadline for FY 2019-20 has been extended to November 30, 2020 from July 31, 2020. “Due date for all income-tax return for FY 2019-20 will be extended from July 31 2020 and 31 October 31, 2020 to November 30, 2020 and tax audit from September 30, 2020 to 31st October 2020,
- The date for making payment without additional amount under the “Vivad Se Vishwas” scheme will be extended to 31st Dec 2020
- Date of assessments getting barred as on Sep 30, 2020 extended to December 31, 2020
- Date of assessments getting barred as on March 31, 2021 extended to September 30, 2021
6. Income tax department has notified the ‘safe harbour’ rates for 2019-20 fiscal for calculation of transfer pricing by foreign companies in India. CBDT has notified changes to Rules 10TD and 10TE of Income Tax Rules relating to Safe Harbour Rules. It said rates applicable from Assessment Year (AY) 2017-18 to 2019-20 will continue to apply for AY 2020-21. Transfer pricing implies the prices at which various overseas divisions of a company transact with each other.
7. Clarifications in respect of prescribed electronic modes under section 269SU of the Income-tax Act, 1961
CBDT vide Circular No.12 /2020 dated 20th May, 2020: it is hereby clarified that the provisions of section 269SU of the Act shall not be applicable to a specified person having only B2B transaction s (i.e. no transaction with retail customer/consumer) if at least 95% of aggregate of all amounts received during the previous year, including amount received for sales, turnover or gross receipts, are by any mode other than cash.
8. Notification No. 26/2020 Dated 21-05-2020, As per section 10(46) Central Government notified kerala cooperative development and welfare fund board , Trivandrum (PAN AACTT3875A), a Board constituted by the Government of Kerala, in respect of the following specified income arising to that Board, namely:-
(a) Membership Fees;
(b) Annual Renewal Fees;
(c) Risk Fund Contribution and Assistance; and
(d) Interest earned on (a) to (c) above.
This notification shall be effective subject to the conditions that Kerala Cooperative Development and Welfare Fund Board,- (a) shall not engage in any commercial activity; (b) activities and the nature of the specified income shall remain unchanged throughout the financial years; (c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961; and (d) shall file the audit report along with return, duly verified by the accountant as provided in explanation to section 288(2) of the Income-tax Act, 1961 along with a certificate from the chartered accountant that the above conditions are satisfied.
9. CBDT notifies Form of Annual Information Statement u/s 285BB by inserting rule 114-I. This will replace the existing Form 26AS of TDS/TCS
Notification No. 30/2020-Income TaxDated- 28th May, 2020
The Finance Act 2020, in order to extend the scope of Form 26AS beyond the information about tax deducted, inserted a new section 285BB regarding Annual Information Statement.
This said section provides that the prescribed income-tax authority or the person authorised by such authority shall upload in the registered account of the assessee an annual information statement in such form and manner, within such time and along with such information, which is in the possession of an income-tax authority, as may be prescribed. They shall come into force with effect from the 1st day of June, 2020.
The Principal Director General of Income-tax (Systems) or the Director General of lncome-tax (Systems) or any person authorised by him shall, under section 285BB of the Income-tax Act, 1961, upload in the registered account of the assessee an annual information statement in Form No. 26AS containing the information specified in column (2) of the table below, which is in his possession within three months from the end of the month in which the information is received by him:-
In Appendix II, Form 26AS shall be substituted by the following Form, namely:-
| Form 26AS | Annual Information Statement [See rule 114-I ] |
Financial Year: :XX:XX-:XX |
| Assessment Year: X:XXX-XX |
Part A
- Permanent Account Number:
- Aadhaar Number:
- Name:
- Date of Birth/Incorporation:
- Mobile No.:
- Email Address :
- Address:
Part B
- Information relating to tax deducted or collected at source
- Information relating to specified financial transaction
- Information relating to payment of taxes
- Information relating to demand and refund
- Information relating to pending proceedings
- Information relating to completed proceedings
- Any other information in relation to sub-rule (2) of rule 114-I
10. CBDT amends Rule 10V for grant of exemption to eligible funds from business connections in India. CA report to be filed in Form 3CEJA u/s 9A
CBDT vide Notification No. 29/2020, dated 27th May, 2020 amended Guidelines for application of section 9A. Section 9A contains provisions related to Certain activities not to constitute business connection in India.
CBDT has also notified Following new forms and Annexures-
-FORM No. 3CEJA- Report from an accountant to be furnished for purpose of section 9A regarding fulfillment of certain conditions by an eligible investment fund with
-ANNEXURE TO FORM No. 3CEJA – Particulars relating to fund management activity required to be furnished for the purposes of section 9A of the Income-tax Act, 1961
-FORM No 3CEK- Statement to be furnished by an eligible investment fund to the Assessing Officer
11. As per press release dated 28-05-2020, FM launches facility of Instant PAN through Aadhaar based e-KYC
This facility is now available for those PAN applicants who possess a valid Aadhaar number and have a mobile number registered with Aadhaar. The allotment process is paperless and an electronic PAN (e-PAN) is issued to the applicants free of cost.
12. Government should consider keeping in abeyance the 2 per cent equalisation levy on e-commerce companies as there are ambiguities surrounding its applicability. Budget 2020-21, expanded the scope of “equalisation levy” to include consideration received by e-commerce operators from e-commerce supply or services. The 2 per cent levy came into effect from April 1, 2020.
Disclaimer: Every care has been taken in the preparation of this article to ensure its accuracy. The views contained in this article are personal and the contents of this document are solely for informational purpose and it does not constitute professional advice that may be required before acting on any matter. Adequate attention has been given to avoid any clerical error if it still persists. Kindly intimate us to avoid such error for the benefits of others.
The Author “CA. Mohit Kumar”can be reached at email- camohitkumar25@gmail.com
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