There are certain rules about to change from next month in accordance with the announcements made in the Union Budget by Finance Minister Nirmala Sitharaman. One of the important changes that will come into effect from next month is related to income tax returns filing. Come July 1 and taxpayers may have to pay double Tax Deducted At Source (TDS) in case they have failed to file their TDS for the last two years.
Deduction of higher rates of TDS
The budget had proposed the insertion of new Sections 206AB and 206CCA in the Income Tax Act as a special provision for the deduction of higher rates of TDS and TCS, respectively for the non-filers of an income tax return. As per the proposal, TDS will be deducted at twice the applicable rate as per the Income Tax Act or 5%, whichever is higher in case the person hasn’t filed ITR for the past two years (and the time limit for filing the ITR is also over) and a TDS of more than ₹50,000 was deducted in each of the past two years from that person. So, the deductor will have to ensure that both these conditions are fulfilled.
In view of the Covid-19 pandemic, the tax department has been extending several deadlines for filing returns for the year 2020-21 for individual taxpayers as well as businesses tax returns.
The Central Board of Direct Taxes (CBDT) has extended the deadlines to file income tax returns for the financial year 2021. The last date of filing Tax Deducted at Source (TDS) for the fourth quarter of the financial year 2020-21 has been extended to June 30, according to the circular.
Taxpayers can now file their tax returns by September 30. The Central Board of Direct Taxes (CBDT) has also extended the ITR filing deadline for companies to November 30.
New website for ITR filing
Meanwhile, the income tax department of India rolled out its new website, www.incometax.gov.in, which aims to simplify income tax return (ITR) filing. Apart from the various other features of this new income tax website, the taxpayer will be provided free ITR preparation software for ITR Form-1 and ITR Form-2. The new portal has a simplified download feature for Form 26As as well.