ITR filing deadline extended from Dec 31 to January 10, 2021 for these taxpayers

The government extended the deadline to file income tax return (ITR) for FY 2019-20 for most individuals from the earlier deadline of December 31, 2020, to January 10, 2021, as per the press release dated December 30, 2020. The extension of the deadline is for those individuals whose accounts are not required to be audited and who usually file their income tax return using ITR-1 or ITR-4 forms, as applicable.

This was the third time that the government extended the deadline to file a tax return - first from the normal deadline of July 31 to November 30, 2020, and then to December 31, 2020.

Further the press release stated that the deadline for other taxpayers, such as companies etc., whose accounts are required to be audited (including partners of a firm) and/or those who have to submit a report in respect to international financial transactions has been extended to February 15, 2021.

New due dates for various compliance under Direct Tax Laws
Source: Taxmann.com

The government has also extended the date of furnishing the tax audit report to January 15, 2021, from the current deadline of December 31, 2o20. The last date of furnishing declaration under Vivad se Vishwaas Scheme has also been extended to January 31, 2021, from the earlier deadline of December 31, 2020.

Taxpayers have been asking for this extension of the ITR filing deadline due to the on-going novel coronavirus pandemic. Many chartered accountants and tax practitioner societies had appealed to the government to extend the ITR filing deadline to allow sufficient time for individuals to file ITR properly. The on-going pandemic has made it difficult for people to collect information and file their income tax returns correctly, especially those who are not very technology savvy. For instance, senior citizens who do not use Net-banking facility cannot ascertain correct savings account interest income and fixed deposit interest income without getting their passbooks updated or collecting interest certificate from the bank branch.

Further, this year, if the ITR was not filed by the earlier deadline December 31, then the penalty or late filing fees levied for filing a belated ITR would have been twice that payable the previous year. This is because if you miss the normal ITR filing deadline (i.e. July 31) and file a belated return by December 31 of the same year, then a late filing fee of Rs 5000 is payable. However, if belated ITR is filed between January 1, and March 31 of the relevant assessment year then the late filing fee is Rs 10,000. As the period between July to December 31 would already had been over once the deadline of December 31 was missed, a higher penalty of Rs 10,000 would automatically be applied. Thus, the extension will provide relief to individuals who may have missed the deadline and have had to file a belated ITR with the higher penalty.

It is to be noted that late filing fees or penalty are only Rs 1,000 for those with taxable income up to Rs 5 lakh and those required to file returns under the seventh proviso of Section 139(1) of the Income-tax Act. This is a recently introduced proviso which makes it mandatory for people to file ITRs if they meet certain specified criteria even if they are not mandatorily required to do so under the normal/regular provisions of the IT Act.

Under this newly inserted seventh proviso of section 139 of the Income-tax Act, ITR filing is mandatory in the following cases:
A) If you have deposited Rs 1 crore or more in one or more current accounts maintained with a bank or co-operative bank;
B) If you have spent Rs 2 lakh or more on foreign travel on self or any other person in the relevant financial year; and
C) If you have paid an electricity bill of Rs 1 lakh or more in the relevant FY.