Tax Updates

For individuals [not subject to tax audit provisions under Income-tax Act, 1961 (‘the Act’)], the income tax return (ITR) filing deadline for Financial Year (FY) 2020-21 (Assessment Year 2021-22) has been extended from 31 July, 2021 to 30 September, 2021 owing to the ongoing COVID-19 pandemic. ITR forms (Forms 1, 2 and 4) for FY 2020-21 have already been notified by the Central Board of Direct Taxes (CBDT). In this article, a few important aspects which one must consider before filing ITR have been enumerated: 1. Choose correct ITR form It is important to select the applicable ITR form depending upon the taxpayer’s residential status and income earned from various sources for an accurate filing. For example, form ITR-1 can only be used by a resident individual having total income up to Rs 50 lakh from salary, one house property and income from other sources. It cannot be used by a taxpayer who is a non-resident or a not ordinary resident or have capital gains for which form ITR-2 has t...

The Government has decided to provide income tax exemption to the amount received by a taxpayer for medical treatment from an employer or from any person for treatment of COVID-19 during the financial year 2019-20 and subsequent years.   This was stated by Minister of State for Finance Shri Pankaj Chaudhary in a written reply to a question in the Lok Sabha on July 19, 2021. The Minister stated that  Income-tax exemption shall be provided to the amount received by a taxpayer for medical treatment from an employer or from any person for treatment of COVID-19 during financial year 2019-20 and subsequent years. The Minister further stated that  the aim of this exemption is to provide relief to taxpayers who suffered on account of COVID-19 and had to incur sum for medical treatment of COVID-19 after taking help from employer or any person . It is the stated policy of the Government to discourage cash transactions and move towards less cash economy. Hence,  there is no pro...