Aadhaar-PAN linking to ITR filing, 8 financial deadlines extended recently amid COVID-19 outbreak

In view of the lockdown and restrictions due to the COVID 19 pandemic, the Government of India has recently announced certain relaxations on the timelines relating to statutory compliance matters. The announcement was made during the last week of March 2020 and an ordinance was passed by the government on March 31, 2020. Further, the government has announced further extension of timelines and issued a notification and press release on June 24, 2020.

From an individual tax perspective, a major relief has been the extension of due dates for filing of income tax returns for FY 2018-19, be it the belated tax return or revision of tax return already filed. Extended time has also been provided for linking PAN and Aadhaar, as well as for investing in tax relief eligible investments such as insurance premiums, medical premium and donations for FY 2019-20.

Employers have also been provided extended time for payment of TDS, filing of e-TDS returns, issue of Form No.16 etc.

Please note, the earlier due dates for all the below compliances was extended to June 30, 2020 and the same has now been extended further. Here is a quick snapshot of the extended deadlines along with the original due dates.

Some aspects that need to be kept in mind are:

# The last option for an individual to file his tax return for FY 2018-19 is July 31, 2020, whether it is revised or belated. After this date passes he would not be in a position to file his returns. If there is a filing requirement, tax payers are well advised to file the tax returns within the extended timeline. Penalty for delay in filing of tax returns of Rs 1,000 where the total income is below Rs 5 lakh and Rs 10,000 if total income is over Rs 5 lakh, continues to apply.

# Where the taxpayer has made investments during the period April–July 2020 and proposes to claim the same for the FY 2019-20, it is important to disclose the same in schedule DI of income tax return.

# In case PAN of the taxpayer is not linked with Aadhaar within the due date, the PAN becomes inoperative. Hence this is an important action that needs to be taken up by the taxpayer. Moreover, the employer who is responsible for withholding the taxes and reporting the same is also well advised to verify the same. Where the PAN is invalid, the employer may need to deduct taxes at a minimum rate of 20%, which could impact the employees’ cash flows from a tax payout perspective.

Other tax filing deadlines which have been extended and which individual taxpayers need to be aware of are as below:

* The tax authorities have extended the due date of filing the tax return for the FY 2019-20 from July 31, 2020 to November 30, 2020. However, if the taxes due on the tax return are more than Rs 1,00,000 for the year, the interest for delay in filing the tax returns will be triggered beyond July 31, 2020.