September 30th reminds us of that time of the year where companies and other businesses liable for tax audit need to file their tax returns. This September happens to be different. The deadlines to file tax returns for FY 2019-20 has been extended to 30th November 2020. However, this doesn’t mean that 30th September is not an important date. This year, three deadlines happen to fall on 30th September. Let’s take a look at them.
1. Belated filing of income tax returns for FY 2018-19
The original deadline for filing income tax returns for FY 2018-19 was 31st March 2020. Due to the lockdown imposed by the government following the COVID-19 outbreak, the deadline was extended to 30th September 2020.
The return filed will be a belated return under Section 139(4) of the Income Tax Act. For belated returns being filed which have a tax liability exceeding Rs.5 lakh, a penalty of Rs.10,000 will be imposed. For returns which have a tax liability up to Rs.5 lakh, the late fee charged will be Rs.1,000. No late fees will be levied if the tax filer’s gross total income does not exceed the basic exemption limit.
2. Claiming exemptions from Capital Gains under Section 54
The deadline for making investments and claiming exemptions under Sections 54 to 54GB of the Income Tax Act on Capital Gains earned has also been extended to 30th September 2020. The government allows these investments to be made from the money earned as capital gains through the sale of capital assets to reduce the taxpayer’s tax liability.
These investments could include purchase or construction of house property or investments in specified bonds. Any investments made up to 30th September 2020 will be considered for claiming deduction from the total capital gains earned. This applies to those cases where the deadline for making investments was expiring between 20th March 2020 and 29 June 2020.
3. Verification of previous years’ ITRs
All individuals who have not yet verified their income tax returns for FY 2014-15, 2015-16, 2016-17, 2017-18 and 2018-19 can now do by 30th September 2020. The CBDT (Central Board of Direct Taxes) had issued a circular on 13th July 2020, allowing the one-time verification of income tax returns for these specified financial years.
If the individual does not complete verification of their income tax return, then it would be assumed that the return has not been filed. Penal provisions could apply in such cases. If the individual is eligible for a tax refund, he will get the refund only after the verification has been completed, as this step is necessary for his income tax return to get processed.
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