Income Tax Department to issue new normas for filimg ITR in view of extension of lockdown

Many taxpayers heaved a sigh of relief when the Finance Minister Nirmala Sitharaman has announced that the date of filing Income Tax Returns (ITR) had been extended till 31 July 2020 instead of March in light of the national lockdown to contain the spread of the COVID-19 virus that has been rampaging the country since January of this year.

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“ITR date pushed back”

However, with the announcement of the extension of the lockdown till 3 May, many taxpayers raised questions regarding the forms of the ITR filing in light of this extension. This led to the Income Tax Department working on revising its ITR forms to ensure that the citizens can avail of the relief measures provided by the government during the lockdown period. Due to the outbreak of the pandemic and the resultant national quarantine which began from March 25, the government has extended various timelines including those relating to investments and expenses under Section 80C.

The deadline for making investment or payments for claiming deduction under Section 80C (LIC, PPF, NSC, ELSS mutual funds, etc.), 80D (Mediclaim), 80G (Donations), etc. for FY 2019-20 has been extended till June 30. Besides, the dates for making an investment,
construction or purchase for claiming rollover benefit for capital gains under has also been extended till June 30.

“Income Tax Department to revise ITR Forms”

“In order to enable income taxpayers to avail full benefits of various timeline extensions granted by the Government of India due to COVID-19 pandemic situations, the CBDT is revising the return forms for FY 2019-20 (The assessment Year 2020-21) which shall be notified by the end of this month,” the Finance Ministry announced in a release on 19 April.

These forms are being revised to ensure that they allow taxpayers to enjoy the benefits of their transactions carried out in the period between 1 April 2020 and 30 June 2020, thus reducing the burden they would have to face in this period. Further, many speculate that the Income Tax Department may extend the last date for filing of the ITR this year past 31 July in light of the extension.

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The Finance Ministry added that once the forms have been revised and notified, the Income Tax Department will further work on required changes in the software and return filing utility enhancing the process to fit the situation. These forms after the consequential changes have been made to the software will be available by 31 May 2020.

“Given that the government expects to notify the new ITR forms/ utilities by end of May 2020 coupled with the fact that still, taxpayers will have time to make tax-saving investments by 30th June, it may leave taxpayers with lesser time to comply with ITR filing by end of July. It would, therefore, be not unreasonable to expect an extension in the due date of filing the ITRs as well, which may be announced by the government subsequently,” Shailesh Kumar, Director, Nangia Andersen Consulting had stated in response to the announcement.

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According to the regular procedure, the ITR forms are notified immediately after the closure of that financial year at the end of March will require taxpayers to file their ITRs before the due date of 31 July. Changes have been made related to the disclosures will ensure that the Income Tax Department to release the ITR-1 (Sahaj) and ITR-4 (Sugam) forms in January.

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