Direct Tax Alert: CBDT further extends the deadline for filing of Tax Return; furnishing of Tax Audit Report and Transfer Pricing Report and Vivad se Vishwas

Background

In light of COVID-19 pandemic and consequent measures undertaken by the Indian Government, different statutory deadlines have been extended from time to time. On Direct Tax front, Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (‘Ordinance’) extended all the deadlines falling between 22 March 2020 and 31 December 2020 to 31 March 2021 (subject to some exceptions). While the Income-tax Act, 1961 (IT Act) provides for different tax return filing deadline (i.e. 31 July and 31 October, as the case may be) depending upon the type of taxpayer, the Ordinance provides that for all types of taxpayers the deadline shall be 30 November 2020. Accordingly, the deadline for furnishing of Tax Audit Report (TAR) and Transfer Pricing (TP) Report was extended to 31 October 2020 from 30 September 2020. Thereafter, this deadline for filing the tax return was extended^[1] to 31 December 2020 / 31 January 2021 and that for filing of TAR and TP to 31 December 2020.

Recently, the Finance Ministry has released a Press Release to further extend the deadline for filing of income tax return, furnishing of TAR and TP Report. We, at BDO in India, have summarised this Press Release hereunder:

Extension of tax return deadline

The revised deadline is tabulated hereunder:

Extension of deadline for furnishing of audit reports under the IT Act

The deadline for furnishing of various audit reports (including TAR and TP report) under the IT Act have been further extended to 15 January 2021.

Relaxation from interest under section 234A of the IT Act

In order to provide relief to small and middle-class taxpayers in the matter of payment of self-assessment tax, the deadline for payment of self-assessment tax date has also been further extended to

• 15 February 2021 for taxpayers covered by point 1 and 2 above.
• 10 January 2021 for taxpayers covered by point 3 above

Extension under Vivad se Vishwas Act, 2020 (VsV Scheme)

The deadline for filing declaration under the VsV Scheme has also been extended from 31 December 2020 to 31 January 2021. Further, the deadline for passing orders under the VsV Scheme has been extended from 30 January 2021 to 31 January 2021.

Extension for passing order or issuance of notice by the tax authorities

The deadline for passing order or issue notice has been further extended to 31 March 2021.

BDO Comments

With the country still reeling under the COVID-19 pandemic and people struggling to reach their workplace due to travel restriction, representations were made for extending the deadlines. The extension has come as huge relief as the taxpayer will have few more days at its disposal to comply with the deadlines and thereby avoid consequential interest and penalty implication.