Finance Ministry Extends Deadline Of IT Act Compliances; COVID Treatment Expenditure & COVID Death Ex-Gratia Exempted From Tax

It has been decided to provide an 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 FY 2019-20 and subsequent years.

Further, it has also been decided to provide an income-tax exemption to ex-gratia payment received by family members of a person from the employer of such person or from other person on the death of the person on account of Covid-19 during FY 2019-20 and subsequent years.

"The exemption shall be allowed without any limit for the amount received from the employer and the exemption shall be limited to Rs. 10 lakh in aggregate for the amount received from any other persons," the Notification of the Government states.

Necessary legislative amendments for effecting these decisions shall be proposed in due the course of time, the ministry said.

Extension of Timelines

• Objections to Dispute Resolution Panel (DRP) and Assessing Officer under section 144C of the Income-tax Act, 1961 for which the last date of filing under that section is 1^st June, 2021 or thereafter, may be filed within the time provided in that section or by 31^st August, 2021, whichever is later.
• The Statement of Deduction of Tax for the last quarter of the Financial Year 2020-21, required to be furnished on or before 31^st May, 2021 under Rule 31A of the Income-tax Rules,1962, as extended to 30^th June, 2021 vide Circular No.9 of 2021, may be furnished on or before 15^th July, 2021.
• The Certificate of Tax Deducted at Source in Form No.16, required to be furnished to the employee by 15^th June, 2021 under Rule 31 of the Rules, as extended to 15^th July, 2021 vide Circular No.9 of 2021, may be furnished on or before 31^st July, 2021.

[This would leave exactly two months with the individual taxpayers to file their income tax returns (ITR) as most individuals are able to finalise their taxes and ITRs only after they receive their Form 16. The current deadline for filing ITR for FY2020-21 is September 30, 2021.]

• The compliances to be made by the taxpayers such as investment, deposit, payment, acquisition, purchase, construction or such other action, by whatever name called, for the purpose of claiming any exemption under the provisions contained in Section 54 to 54GB of the Act, for which the last date of such compliance falls between 1^st April, 2021 to 29^th September, 2021 (both days inclusive), may be completed on or before 30^th September, 2021.
• Last date of linkage of Aadhaar with PAN under section 139AA of the Act, which was earlier extended to 30^th June, 2021 is further extended to 30^th September, 2021.

• Last date of payment of an amount under Vivad se Vishwas(without additional amount) which was earlier extended to 30^th June, 2021 is further extended to 31^st August, 2021.

• Last date of payment of an amount under Vivad se Vishwas (with additional amount) has been notified as 31^st October, 2021.

• Time Limit for passing assessment order which was earlier extended to 30^th June, 2021 is further extended to 30^th September, 2021.

• Time Limit for passing penalty order which was earlier extended to 30^th June, 2021 is further extended to 30^th September, 2021.

• Time Limit for processing Equalisation Levy returns which was earlier extended to 30^th June, 2021 is further extended to 30^th September, 2021.