These are rough times. We will bring you regular updates on Covid-19 and how it may impact your finances through this Coronavirus Dashboard.

Tax Compliance Updates

Income Tax

• Ministry of Finance to release pending Income Tax refunds up to INR 5 Lakh & all pending GST and Customs refunds. A highly appreciated move during crucial times. Are you expecting a long due refund? Check your Income Tax Refund status here.

• The last date for filing Income Tax Returns for FY 18-19 extended to June 30 from March 31 due to the Covid outbreak.

• Subsequently, all compliances under the Income Tax Act, Wealth Tax Act, Benami Transaction Act, Vivaad se Vishwaas, have been extended to June 30, 2020.
• May 15, 2020, Last date for Employers to issue Form-16.
• June 15, 2020, Quarterly Form 16A.
• June 30, 2020, Last date for investing under chapter VIA.
• June 30, 2020, Last date for filing Belated Tax Return for FY 2018-19.

GST

• The last date for filing March-April-May GST returns extended to June 30, 2020.

• No interests, penalty or late fees to be charged for late filing of GST Returns for companies with Turnover of INR 5 Crore of less.

TDS

• Interests charged on delayed deposits of TDS reduced to 9% from 18%.

• April, 30, 2020, Last date for TDS Deposits.
• May 15, 2020, Due date Q4 TCS Deposit.
• May 31, 2020, Due date for Q4 TDS Return
• June 7, 2020, Due date for TDS Deposit.
• June 15, 2020, Quarterly TDS Certificate

ROC Compliance

• June 30, 2020, Last date for linking PAN with Aadhar.

• Mandatory requirement of holding board meetings relaxed by 60 days, this relaxation is for the next two quarters.

• Newly incorporated companies get an additional 6 more months to file the declaration.

• (MSMEs) The threshold for default under IBC raised to INR 1 Crore from INR 1 Lakh.

Economic Package Updates and other Financial Updates

Economic Package

March 26, 2020, For the next three months, the Government to pay the full contribution to EPF for companies with 100+ employees and 90% earning below INR 15,000 per month.

• FM announced Economic Package of INR 1.7 Crore.

• Insurance cover of INR 50 Lakh per person announced for Doctors, Paramedic and Healthcare Workers.

• 20 Crore women Jan Dhan Yojna account holders to get INR 500 every month for the next 3 months.

• 8.69 Crore farmers to get INR 2000 under PM-Kisan Yojna

• FM announces an ex-gratia of INR 1,000 for 3 Crore poor senior citizens.

• Under PM Garib Anna Yojna, 80 Crore poor people to get 5 Kg grains per month for 3 months.

Other Financial Updates

April 3, 2020, World Bank approves and emergency fund of $ 1 Billion to India.

April 1, 2020, Financial year 2020-21 starts in India.

March 27, 2020, In a Press Conference, RBI Governor announced the reduction in Repo rates by 75 bps to 4.4%. Earlier the Repo Rate was 5.15%.

• The Reverse Repo rates have been cut by 90 bps to 4%.
• A liquidity boost of INR 3.7 Crore announced by the RBI.

March 20, 2020, The IRS declared that US taxpayers can file their taxes until July 15. The previous deadline was April 15.

March 19, 2020, Prime Minister Narendra Modi announces an ‘Economic Task Force’ for providing Economic packages to MSMEs and other worst-hit sectors. Read More.

March 18, 2020, Several companies, banks, NBFCs have refused to comply with the summons of the Income Tax Department, stating COVID-19 as a reason.

March 14, 2020, GST on Repair and Overhaul on aircraft reduced to 5% to boost the badly affected Aviation Industry.

COVID-19 Latest Updates

April 14, 2020, Narendra Modi has announced extension of the complete lockdown of the country till May 3.

April 14, 2020, Total cases in India rise to 10,363. As per Ministry of Health and Family Welfare:-

• Active cases : 8,987
• Cured/Discharged : 1036
• Deaths : 339
• Migrated : 1

April 12, 2020, India is planning to restart some manufacturing after April 15 to help offset the economic damage of a nationwide coronavirus lockdown, two government sources said, even as it weighs extending the lockdown.

April 12, 2020, China’s reports 108 new COVID-19 cases. Fears for a second wave arise.

April 9, 2020, India crosses the 5,700 mark of total positive cases. Odisha- first state to extend lockdown till 30th April.

April 6, 2020, Doubling rate of COVID-19 at 4 days as India registered 4367 infected cases. 330 Individuals have recovered.

April 3, 2020, Asia’s biggest slum, Dharavi registers 3 new cases.

April 1, 2020, White House projected 1,00,000- 2,40,000 deaths due to COVID-19. New York became the newest epicenter of the Virus registering over 1,500 deaths alone.

March 31, 2020, As many as 2000 Individuals found at the Nizamuddin area. Individuals were a part of Tablighi-Jamat.

March 30, 2020, Total number of infected Individuals in India reaches 1200 and recovered Individuals reach 102. Sadly, 29 Individuals have deceased.

• Train Coaches being prepared as Isolation Wards for COVID-19 patients as cases continue to surge.

March 28, 2020, Thousands of Migrant laborers accumulated at Delhi’s Vasant Vihaar Bus Terminal wanting to go back to their native land.

March 25, 2020, Prince Charles of the British Royal Family tested positive for Covid-19.

March 24, 2020, PM announces complete lock-down for 21 days i.e until April 14, 2020. INR 15,000 Crore allocated for Healthcare systems.

• Tokyo Olympics to be held in the Summer of 2021

March 23, 2020, India has suspended operations of domestic schedule commercial airlines effective from the midnight that is 23.59 hours IST on 24/3/2020

• COVID-19 causing mass hysteria among investors. BSE hit its 10% lower circuit level after reopening to a 45-minute halt. S&P BSE lost 3,600 points.

March 22, 2020, The Government in India halts passenger trains till 31st March 2020.

Match 19, 2020, PM Narendra Modi addressed the nation and announced a Janta Curfew on Sunday. An ‘Economic Package’ was also announced by PM Modi.

March 18, 2020, Indian Army reports its first case of Covid-19.

March 12, 2020, India registers it’s first confirmed death from Covid-19. The 76-year-old man from Karnataka had traveled from Saudi Arabia.

March 11, 2020, WHO declares Covid-19 as a ‘Pandemic’, urges countries to take proactive measures.

January 30, 2020, India registers its first Covid-19 case. Quarantined Individual from Kerala. The patient is a student at Wuhan University, China.

Quicko Updates

March 21, 2020, Being a responsible team of developers, chartered accountants and content creators, we have decided to Work From Home. It does not dilute our commitment to make Taxes Simple For All.

March 20, 2020, Quicko’s celebrates partnering with HDFC Securities, with https://hdfcsecurities.quicko.com/. The official tax compliance partner for HDFC Traders.

March 20, 2020, Taxes for Traders are now simpler. Quicko announced https://trader.quicko.com/.

Useful Resources

• Coronavirus Live Updates
• COVID-19 is Going to Come Down Hard on India, Especially it’s Poor
• How prepared is India to combat Covid-19?
• Covid-19 India Interactive map
• Advisory- Social Distancing
• WHO- Coronavirus

The GST return filing due date is extended so many times that it feels like running in an endless marathon…sigh !! On December 8, 2018, the CBIC extended the due date for filing GSTR 9, GSTR 9A, GSTR 9C from 31st December 2018 to 31st March 2019 for FY 2017-18 which was later extended to 30th June 2019.

Unsurprisingly, in the 39th GST Council Meet, the due date for F.Y 2018-19 was further extended up to 30th June 2020.

Audit Limit Increased

In the 39th Council Meet, the audit limit for GST for F.Y 2017-18 and F.Y 2018-19 was increased to INR 5 Crore from INR 2 Crore. Previously, up to F.Y 2017-18, Individuals with income of INR 2 Crore or more were required to file GSTR-9 and GSTR-9C. The condition for F.Y 2018-19 remains the same but with increased Audit limit up to INR 5 Crore.

FinMin Nirmala Sitharaman announced a similar change to the Income Tax Audit Limit in her Budget speech. The Tax Audit limit was stretched from INR 1 Crore to INR 5 Crore (with some conditions). The council also announced relaxation to MSMEs from the furnishing of Reconciliation Statement in FORM GSTR-9C for the financial year 2018 -19.

Also, let’s agree that Audits are expensive and tiresome. Usually, one has to do a lot of back and forth with their Chartered Accountants. Hence, life has become easier for many Businesses. Adding on, with the increased Audit Limit, scores of Individuals will save on compliance costs.

P.S. In case, you missed our Blog on Income Tax Audit Applicability, don’t worry, we got you covered.

GSTR-9 last date extended

The 39th GST Council Meet announced an extended last date for filing the GSTR-9 Annual Return. What feels like a Cat and Mouse chase, was lauded by the taxpayers. Individuals and Companies will now be able to file their Annual Return for F.Y 2018-19 by June 30, 2020. Hence, fingers crossed more businesses will comply by filing their GST Annual Return.

Late filing fees a thing of the past

Gone are the days when we worried about late filing fees. Individuals filing their Annual GST Return for F.Y 2017-18 and F.Y 2018-19 won’t be required to pay the late filing fee!!

Prior to the 39th GST Council meet, late filing fees for GST Annual Returns were INR 200 per day of delay. Even though the number of taxpayers filing their GST Annual Returns is steadily increasing, waving off the late filing fees might prompt more people to file their Annual Returns.

It looks like the Government is trying to motivate more people to file their Annual Returns by giving out benefits. Could we see the number of taxpayers filing their GST Annual Return skyrocket in the first quarter of F.Y 2020-21?

New GST System pushed back…again

The New GST Return System seems like a promised neverland. It was announced earlier that the New GST Returns will come in effect from April 1, 2020. But, in the 39th GST Council Meet, the date was pushed back to September 30, 2020… Old School ITD!!

The New Returns claims to bring transparency and efficiency. The Pros of the New Returns outweigh the old by a margin. For instance, the incumbent GST Return System demands the filing of two returns while the New Return System demands the filing of just one Return.

To penalize the Businesses who have delayed the payment of their GST liability, the Council introduced a Retrospective Amendment. Interest will be charged on Net Cash Liability with a retrospective effect, which means that interest on delay in payment of GST would be applicable from July 1, 2017.

It is safe to claim that the New GST Return System is way simpler than the persistent one! Sadly, taxpayers might have to wait to reap its benefits. But, there’s a catch here, Could the New GST System be further postponed amid the Covid-19 Pandemic? Guess, we’ll have to wait.

In other news, GST rates for Mobile increased to 18% from 12%. To address the ailing aviation sector, GST on Repair and Overhaul on aircraft was reduced to 5% from 18%. Also, the Indian Highways Management Company Ltd (IHMCL) and Goods and Services Tax Network (GSTN) signed an MoU for integrating FASTag with the GST e-way bill system.

Off late many Individuals have been receiving SMS from the Income Tax Department. No, the ITD doesn’t want to become your texting pal… Rather, the SMS’ dictates that their PANs have been flagged in lieu of not filing their ITR. Sure enough, many traders were baffled by it. No matter how confusing it might seem, there is an explanation and a way out of it.

This is a snippet of SMS sent out to Individuals for non-filing of ITR. If you received an SMS as well, it might be advisable to understand why you received it.

As for the individuals, many complained that their taxable income was way below the slab rates. Still, they were unable to explain why they received this SMS. Any Individual who received an SMS from the ITD, must fulfill these Conditions.

Condition 1:

For F.Y 2019-20, the due date to file the Original Income Tax Return was extended to 10th January 2021 (when tax audit is not applicable) and 15th February 2021 ( when tax audit is applicable). However, a Belated Return (with the due penalty) can be filed up to 31st March 2021. It won’t hurt being on the good side of the law, and also the Taxman won’t allow non-filers to fly free. Ergo, an SMS on their registered number was sent out causing confusion and chaos.

Condition 2:

Apart from the explanation above, there might be another possible explanation.

You see, Taxman (more like Sherlock) is keeping close tabs on our transactions. Apparently, data of the taxpayer’s tradings transaction can be viewed on the e-compliance portal. Also, ITD has access to the information of your transactions through AIR Reports (Annual Information Return), STT Reports (Securities Transaction Tax Report), CIB (Central Information Branch), and the recent data parnterships CBDT has done with a SEBI, CBIC and MoMSME.

AIR

Annual Information Returns (AIR) are reports submitted to the ITD by your Bank or financial service in case of any High-Value Transaction. So, if you have exercised any of these High-value Transactions, an AIR of your transactions was submitted to the ITD.

Most people might not know that there are seven AIR Codes. These Codes represent different types of transactions and activities. For instance, an individual investing in Bonds or debentures can be reported by AIR 05. similarly, if an individual invests in shares worth INR 1 Lakh or more, it is reported to the ITD under AIR 06.

STT Report

STT Report is submitted by the Exchanges to the ITD to report the information related to trading transactions of securities on which STT (Securities Transaction Tax) is paid. Following are the types of STT Reports:

Similar to AIR, there are five STT codes. These codes represent an Individual’s trading activity. For example, ITD will be intimated by STT 01 if an individual purchased equity shares from a recognized stock exchange. Even when one decides to sell their equity shares, STT 02 will be initiated to the ITD.

CIB

Apart from these two ways, the ITD also receives reports from the Central Information Branch (CIB). There are 14 criteria under CIB. If an Individual falls under any of these criteria, ITD is notified.

There are 14 CIB Reports that include several financial activities. ITD is notified when any Individual conducts any of these activities. Even, when you sell your vehicle, ITD is notified by the code CIB 94. So much so that Time Deposits of INR 1 Lakh or above are classified by code CIB 183.

So, there are several methods through which the ITD can keep track of your financial activity. And when the details in your ITR don’t match with these Reports, ITD notifies you through e-mail and SMS.

P.S. If you wish to learn more about Which Transactions fall under AIR, CIB, STT Reports, feel free to check our article: Notice for Non-filing of ITR: Submit Response on E-Compliance Portal

Now what?

Okay, you received an SMS, Now what? So, turns out that there are two actions that need to be taken.

Action 1: File a Belated/Revised Return

A no-brainer… file your belated return (if you haven’t filed the ITR already) or a revised return (if you have file the return, but didn’t report all your financial activities) before 31st March. If you have already done that, you would be required to go to the Income Tax Department’s Website, and under the e-campaign section enter the response and mode of filing ITR, acknowledgments, and date.

However, in case you have not filed ITR, you should be able to justify your action with an appropriate response and logic. Quicko helps traders stay tax compliant, you can check your options here.

Action 2: File Response under e-Compliance

If you have already filed your return, you might as well confirm the information reported on your PAN by choosing the appropriate option under the e-campaign section on the Income Tax Department’s Website. Using this information, the ITD will take the appropriate action.

So all in all, these steps should address the issue. Apart from that, as a responsible citizen, filing our Income Tax Returns on time should be a moral priority.

Got questions? We are here to answer them all! Shoot’em on TaxQ&A below

Everyone seems to have a Checklist these days… a Bachelor trip checklist, things to do before retirement checklist, post-retirement checklist… you get the point!! But since the Financial Year is coming to an end on 31st March, we have made a Checklist of some pressing Financial Tasks that one needs to bear in mind before this year ends.

We have compiled a list of 7 Financial Tasks that you need to remember.

• Tax-Saving Investment for F.Y 19-20
• Filing Return for A.Y 19-20
• Linking PAN to Aadhar
• Check for Unrealised Losses (LTCG & STCG)
• Check Tax Credit in Form 26AS
• Claim Reimbursement (Salaried Employees)
• Paying your Advance Tax for FY 19-20

Tax Saving Investments

Catch-up Investments are the talk of the town again. It’s that time of the year when people scramble to do Tax Saving Investments. Amid the rush to make Tax Saving Investment, often people don’t understand the intricacies of the same.

P.S. We have a Comprehensive blog on Tax Saving Investments just for you .. 🙂

An Individual can invest in schemes under Chapter VI A and claim Tax Deductions upto INR 1.5 lakh. However, it is empirical that Tax saving Investments should be made after carefully assessing one’s Personal Finance Goals and Risk-Appetite. Hasty Investments could do more harm than good.

File your ITR for A.Y. 2019-20

Unless you fancy hearing from the Income Tax Department, it is no brainier to file your Belated ITR on time. If you have filed your faulty Belated Returns, this could be the last chance to file your Revised Return.

Note that, Individuals with their taxable income less than INR 5 lakh will be required to pay INR 1000 as a penalty. However, if your taxable income is more than INR 5 Lakh, the late filing fees could mount up to INR 10,000.

So make sure to square off your returns before 31st March 2020.

Linking PAN to Aadhar

In Budget 2020, FM Nirmala Sitharaman announced that PAN (Permanent Account Number) and Aadhaar can be used interchangeably. To do so, one needs to link his/her PAN to Aadhar.

P.S. If you are one of those many people who don’t know how to link PAN with Aadhar… We have an article that might help!

In case you failed to link PAN with Aadhar, the ITD can charge a penalty of INR 10,000 for it. Linking both would unarguably make life easy for you. Interlinked PAN and Aadhar are mandatory as they are required to file ITR, open a bank account, for buying and selling of property, applying for a loan or a credit card and for making investments, etc.

Check for Unrealised Losses

Let’s say that you have Unrealised Losses of INR 1.5 lakh in your portfolio (Unrealised loss is the loss that one will incur if he/she sells a stock). On the other hand, let’s assume that you have Realised Profits of INR 6 lakh. By selling the stock with Unrealised Losses, You can convert it into Realised losses. Furthermore, by setting off your Realised Losses against Realised Profits, your Tax Liability will be INR4.5 Lakh…this is called Tax Loss Harvesting

However, there are certain things that one needs to remember:

• Long Term Capital Losses (LTCL) can only be set off against Long Term Capital Gains (LTCG)
• Short Term Capital Losses (STCL) can be set off against Short Term Capital Gains (STCG) and Long Term Capital Gains (LTCG)
• Short Term Capital Loss (STCL) and Long Term Capital Loss (LTCL) can not be set off against any other Income

Checking Tax Credit Statement – Form 26AS

Form 26AS is an annual consolidated tax statement that can be easily accessed from the Income Tax Website. Form 26AS has the information on the Tax credit paid to the Government. Salaried Individuals can double-check the TDS deducted by their employer through Form 26AS.

One can view following details on Form 26AS:

• Details of TDS deducted on Salary, on the sale of Immovable Property, on Rental Income, etc
• Details of Advance Tax paid
• Details of High-Value Transactions
• Details of TCS on sale of a car
• Details of taxes paid by you and tax refunds

Claim Reimbursement for Salaried Individual

The Government has allowed Salaried Employees to claim Tax Exemptions on certain allowances provided by their employer. In order to claim those exemptions, Employees need to provide proof of expenses such as travel expenses, rent receipts, medical expense bills, etc.

If the employee is unable to provide the expense proofs to the employer, he/she would not be able to claim an exemption for the same. Consequently, it would be included as a part of the taxable salary in Form 16.

Advance Tax

Advance Tax is the payment of your total tax liability to the Government in Advance. It has to be paid by Individuals with Tax Liability more than INR 10,000. The due date to pay the last installment of the Advance Tax is 15th March. In the unwanted scenario of failing to pay the Advance Tax, penalty u/s 234B and u/s 234C will be imposed.

Salaried Individuals are not required to pay Advance Tax as TDS is deducted from their Salaries. Apart from salaried Individuals, Advance Tax is applicable to Individuals with non-salary income sources like:

• Income received on Capital Gains i.e, sale of shares, property, car etc.
• Interest received on Fixed Deposits, Recurring Deposits,
• Rent received on house property,
• Earnings through a lottery

Also, if you have paid excess Tax, you can claim a refund as well.

So, all in all, it is highly advisable to follow up on these Financial tasks as they help to lower your Tax liability in some way or the other. Apart from lowering your Tax Liability, they also mitigate the chance of receiving a Notice from our Beloved Taxman.

Stay tuned for blogs related to ITR, TDS, GST and some Crazy Tax Stories.

The Government is looking to slash the Dividend Income-Tax Rates by half. It has been planning to make amends to reduce DDT or Dividend Distribution Tax. The government is considering bringing down the effective Dividend Tax Rate from 43% to 20%. This new rate will be applicable to the domestic individual investors (HNIs) and may benefit the individuals in the highest tax bracket.

Earlier, DDT was 20% taxable in the hands of the company, which made it a pure cost. In Budget 2020, FM Nirmala Sitharaman removed this 20% DDT on companies, making it taxable at the hands of the investors. Shareholders have to pay tax as per their respective tax slabs. And after including the surcharge and cess, the highest bracket results in a 43% tax outgo.

Currently, Foreign Companies (FIIs) have to pay anywhere between 5% to 15% tax on Dividend Income. This varies depending on the tax treaty that India has with a particular foreign country. In comparison to the Foreign Companies, the Local Investors (in the higher income bracket) pay a tax of 43%. Several associations and investors have voiced their opinions about this anomaly. Thereby, seeking regulation on Dividend Income-Tax Rates. The Government has been trying to take the opinions of Senior Revenue Officials, Prominent Mutual Funds, Tax Advisors and Lawyers.

As per treaties the tax rate would be 15% for Mauritius and Singapore, 25% for the US and Canada and 10% plus an additional 5% depending on parameters like Most Favored Nation (MFN) status, etc.

“There is a difference of 22% between tax on dividends paid by a foreign company and by an Indian promoter and this has led to a situation where domestic companies are rushing to pay dividends before April 2020. Bringing parity between tax on dividend paid by Indian companies and foreign companies is a good move and will bring in ease of doing business,” said Girish Vanvari, founder, tax advisory Transaction Square.

Even after the government removed DDT and made it more like TDS, several foreign companies that invest through other countries end up paying taxes as low as 5%. The tax rates continue to remain substantially high for individuals in India and FPIs registered as trusts. This is creating a lot of unease among the Local Investors.

Even as the bears hold global markets at present, there is some chance that this may provide some relief.

Thus, the government may offer the concession by offering a flat 20% tax on dividend income. Stay tuned for the updates….

Source – Economic Times.