 Are you a tax practitioner or commerce student? then here is your dream topic to stay updated with the changes in taxation laws.Important Amendment in Indian Income Tax Law F.Y.2021-221. Extending due date for filing return of
income in some cases, reducing time to file the belated return and to revise
original return and also to remove a difficulty in cases of defective
returns. 1.1. Section 139 of the Act contains provisions in respect of the filing of return of income for different persons or classes of persons. The said the section also provides the due dates for filing of original, belated, and
revised returns of income for different classes of Assesses.
1.2. Extending due date for filing of return by a certain category of
partners: In the case of a firm that is required to furnish a report from an
accountant for entering into an international transaction or specified the domestic transaction, as per Section 92E of the Act, the due date for filing
of original return of income is the 30th November of the assessment year.
Since the total income of such partner can be determined after the books of
accounts of such firm have been finalized, it is proposed that the due date
of such partner be extended to 30th November of the assessment year
1.3. Reducing time to file the belated return and to revise original return:
Sub-sections (4) and (5) of section 139 of the Act contain provisions relating
to the filing of belated and revised returns of income respectively. The belated or revised returns under subsections (4) and (5) respectively of the said section at present could be filed before the end of the assessment year or before the completion of the assessment whichever is earlier. It is proposed that the last date of filing of belated or revised returns of income be reduced by three months. Thus, the belated return. Thus, the belated return or revised return could now be filed
three months before the end of the relevant assessment year or before the
completion of the assessment, whichever is earlier.
1.4. Defective Return: Sub-section (9) of section 139 of the Act lays down
the procedure for curing a defective return. It provides that in case a
return of income is found to be defective, the Assessing Officer will
intimate the defect to the assesses and give him a period of 15 days or more
to rectify the said defect and if the defect is not rectified within the said
period, the return shall be treated as an invalid return and the assesses
will be considered to have never filed a return of income. The Explanation to
the sub-section lists the conditions in which a certain return of income
shall be considered to be defective. Representations have been received that
the aforesaid conditions create difficulties for both the taxpayer and the
Department, as a large number of returns, become defective by application of
the said conditions. This has resulted in a number of grievances. It has been
represented that the conditions given in the said Explanation may be relaxed
in genuine cases. The amendment has been proposed to insert proviso before
the Explanation to sub-section (9) of section 139 of the Act so as to provide
that the Board may specify, by notification, that any of the conditions
specified in clauses (a) to (f) of the said Explanation shall not apply to
such class of assesses or shall apply with such modifications, as may be
specified in such notification.
1.5. These amendments will take effect from 1st April 2021, and will
accordingly, apply to the assessment year 2021-22 and subsequent assessment
years in India. Amendment relating to tax audit under section 44AB in 2021-221. Under section 44AB of the Income-tax Act, every person carrying on
business is required to get his accounts audited if his total sales,
turnover, or gross receipts, in business exceed or exceed one crore rupees in
any previous year. In the case of a person carrying on profession, he is required to get his
accounts audited if his gross receipt in profession exceeds fifty lakh
rupees in any previous year. In order to reduce the compliance burden on small and medium enterprises,
through Finance Act 2020, the threshold limit for a person carrying on the business was increased from one crore rupees to five crore rupees in cases
where-
(i) Aggregate of all receipts in cash during the previous year does not
exceed five percent of such receipt; and (ii) Aggregate of all payments in cash during the previous year does not exceed five percent of such payment.
2. In order to incentivize non-cash transactions to promote the digital
economy and to further reduce the compliance burden of small and medium
enterprises, it is proposed to increase the threshold from five crore rupees
to ten crore rupees in the cases listed above.
3. This amendment will take effect from 1st April 2021 and will accordingly
apply for the assessment year 2021-22 and subsequent assessment years. Amendment of time limit for income tax Assessment completionThe time limit for passing various assessment orders giving effect to
Taxation Ordinance dated 31.03.2020, Atmanirbhar Package dated 13.05.2020,
and CBDT notification dated 24.06.2020 is as below:
Section 153 of the Act contains provisions in respect of the time limit for completion of the assessment, reassessment, and re-computation under the Act.
The sub-section (1) of the said section provides that the time limit for passing an assessment order under section 143 or 144 of the Act. It has been proposed that the time limit for the completion of the assessment
proceedings are reduced by three months. Thus the time for completing of
assessment is proposed to be nine months from the end of the assessment year
in which the income was first assessable, for the assessment year 2021-22 and
subsequent assessment years. This amendment will take effect from 1st April 2021 in India and subsequent
assessment years. The above amendment is very much important for commerce students. |
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