Income Tax

Finance Bill 2021: New due dates under the Income Tax Act

Finance Bill 2021 proposes several amendments in due dates under the Income Tax Act, 1961 ('Act'). It is imperative for a tax professional to know the new due dates after considering the amendments proposed by Finance Bill 2021.

Finance Bill 2021 proposes several amendments in due dates under the Income Tax Act, 1961 (‘Act’). It is important for a tax professional to know the new due dates after considering the changes proposed by Finance Bill 2021.

A few of the important new due dates that would undergo change are due date for revised & belated returns, the date by which the tax officer is required to pass assessment order, the date by which intimation u/s 143(1) to be sent, the date by which notice u/s 143(2) to be sent by tax authorities, etc.

This article provides a summary of due dates that would undergo change post amendment.

Introduction

Tax professionals are required to remember several due dates so that they can advise their clients accordingly. Finance Bill 2021 proposes to make several changes in various due dates under the Income Tax Act, which a tax professional is required to adhere to. Here are some of the important due dates that have undergone a change.

New due date for Revised and Belated Returns

Before Finance Bill 2021

The due date of revised return u/s 139(5) and belated returns u/s 139(4) is the end of the relevant assessment year or before completion of the assessment whichever is earlier.

The due date of revised return and belated return for Assessment Year (‘AY’) 2022-23 (without considering the proposed amendment) would be 31st March 2023.

After Finance Bill 2021

The Finance Bill, 2021 proposes to change the due date of filing a revised and belated return. Accordingly, Section 139(5) and 139(4) of the Act are proposed to be amended. The tax return can now be revised by 3 months prior to the end of the relevant assessment year or before completion of the assessment, whichever is earlier. These amendments will apply from Assessment Year (‘AY’) 2021-22 and subsequent assessment years.

Accordingly, the new due date of revised / belated return, after considering the proposed amendment would be 31st December 2022 for Assessment Year (‘AY’) 2022-23.

New Dates by which the assessing officer is required to pass the assessment order

Before Finance Bill 2021

The time barring date for completion of assessment proceedings by the assessing officer is contained u/s 153 of the Act. Section 153 provides that the assessing officer is required to complete the assessment by 12 months from the end of the assessment year in which the income was first assessable in case of assessment proceedings for AY 2019-20 onwards. Accordingly, the last date by which the assessing officer is required to pass the assessment order for AY 2022-23 (without considering the proposed amendment) would be 12 months from the end of the assessment year, i.e. 31st March 2024.

After Finance Bill 2021

The Finance Bill, 2021 proposes to change the date for completion of assessment proceedings. Accordingly, Section 153 of the Act is proposed to be amended. Assessment proceedings are now required to be completed by 9 months from the end of the assessment year in which the income was first assessable. Accordingly, the last date by which the assessing officer is required to pass the assessment order for AY 2022-23 is 9 months from the end of the assessment year, i.e. 31st December 2023. The 9-month time limit is applicable for assessment proceedings of AY 2021-22 onwards.

New Dates by which intimation is required to be sent

Before Finance Bill 2021

Currently, intimation is required to be sent u/s 143(1) by one year from the end of the financial year in which the return is furnished. Let say, the income tax return for AY 2022-23 is filed by an individual on the last date ie on the due date, which was 31st July 2022. The end of the financial year in which the return is furnished is 31st March 2023, so as per section 143(1) intimation is required to be sent by 31st March 2024 (without considering the proposed amendment)

After Finance Bill 2021

The Finance Bill, 2021 proposes to change the date by which intimation u/s 143(1) would be sent, and accordingly, section 143(1) of the Act is proposed to be amended. The intimation is now required to be sent by 9 months from the end of the financial year in which the return is furnished.

Accordingly, for AY 2022-23, intimation u/s 143(1) would be required to be sent by 31st December 2023.

New Dates by which Notice u/s 143(2) is to be sent to the taxpayer

Before Finance Bill 2021

Currently, notice u/s 143(2) is required to be sent to the taxpayer within 6 months from the end of the financial year in which the return is furnished. Let say, the income tax return for AY 2022-23 is filed by a taxpayer on the last date ie on the due date, which was 31st July 2022. The end of the financial year in which the return is furnished is 31st March 2023; hence notice u/s 143(2) is required to be sent to the taxpayer by 30 September 2023 (without considering the proposed amendment).

After Finance Bill 2021

The Finance Bill, 2021 proposes to change the date by which notice u/s 143(2) would be sent to the taxpayer, and accordingly, section 143(2) of the Act is proposed to be amended. Notice u/s 143(2) is now required to be sent by 3 months from the end of the financial year in which the return is furnished.

Accordingly, for AY 2022-23, notice u/s 143(2) would be required to be sent by 30th June 2023.

Here, in case the tax authorities send the notice u/s 143(2) after 30th June 2023, then the taxpayer can challenge that the entire assessment proceeding as void-ab-intio i.e invalid from the beginning.

A summary of comparison of due dates (pre-amendment and post amendment) discussed above, is given in the table below, for ease of reference.

The example given below is applicable for AY 2022-23

Particulars Old Due Dates before the proposed amendment New Due dates, as proposed by Finance Bill, 2021
The due date for filing a revised return 31st March 2023 31st December 2022
The due date for filing a belated return 31st March 2023 31st December 2022
Date by which assessing officer is required to pass the assessment order 31st March 2024 31st December 2023
Date by which intimation u/s 143(1) is to be sent 31st March 2024 31st December 2023
Date by which Notice u/s 143(2) is to be sent 30th September 2023 30th June 2023

Other important due dates – proposed to be changed by Finance Bill 2021

1. To boost affordable housing, the date by which the project is required to be approved u/s 80-IBA, is proposed to be extended by one year.
2. To boost new start-ups and related investment, the date of incorporation of start-up u/s 80-IAC and exemption u/s 54GB on the transfer of long term residential unit, available to individuals for investment in start-ups, is proposed to be extended by one year.
3. To provide relief to first time home buyers, it is proposed to extend the outer date by which loan is required to be sanctioned u/s 80EEA. The date is proposed to be extended by one year, which will allow the individuals to claim a deduction of interest on loan taken for affordable housing for an extra assessment year.

Date by which notice can be sent to the taxpayer for income escaping assessment

The date by which tax authority is required to issue Notice u/s 148 is provided in new section 149 of the Act.

No such notice can now be issued after 3 years from the end of the relevant assessment year.

However, if the assessing officer has evidence that income likely to

Escape assessment is likely to be more than Rs. 50 lakh for the year, then Notice u/s 148 can be issued up to 10 years from the end of the relevant assessment year.

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Other important dates proposed to be extended, have been tabulated below-

Particulars  Old Due Dates New Due Dates
Date by which project need to be approved by the competent authority, for the purpose of availing deduction u/s 80-IBA of the Act 31st March 2021 31st March 2022
100% tax holiday to a real estate developer in respect of affordable housing.

Deduction available u/s 80-IBA only on fulfillment of all the conditions mentioned u/s 80-IBA of the Act

Date by which loan for affordable housing to be a sanction, for the purpose of availing deduction u/s 80EEA of the Act 31st March 2021 31st March 2022
Deduction of interest on a loan up to Rs. 1.5 lakh in respect of loan taken for affordable housing. The stamp duty value of the residential house should not exceed Rs. 45 lakh

Deduction available u/s 80EEA only on fulfillment of all the conditions mentioned u/s 80EEA of the Act

Date by which start-up is required to be incorporated, for the purpose of availing deduction u/s 80-IAC 1ST April 2022 1st April 2023
100% tax holiday to a start-up engaged in an eligible business

Deduction available u/s 80-IAC only on fulfillment of all the conditions mentioned u/s 80-IAC of the Act

Date by which residential property is required to be transferred for the purpose of claiming exemption u/s 54GB of the Act 31st March 2021 31st March 2022
Exemption for capital gain arising out of the transfer of long term residential unit is available u/s 54GB to individuals/ HUF if net consideration is utilized in subscription in equity shares of eligible start-ups

Exemption u/s 54GB is available only on fulfillment of all the conditions mentioned u/s 54GB of the Act

Date by which certain new provisions would be applicable

New TDS provision on purchase of goods provided in section 194Q of the Act is applicable from 1 July 2021.

New sections 206AB and 206CCA that provide for higher TDS/ TCS rates in case of non-filers of return of income would be applicable from 1 July 2021.

New provisions  Applicability date
TDS on purchase of goods (Section 194Q ) 1st July 2021
Higher TDS/ TCS rate in case of non-filers of return of income (Section 206AB and 206CCA) 1st July 2021

TaxClue Team

Taxclue is an online news portal for reporting all news, articles, judgments, Circulars, orders, and notifications relating to various corporate and tax laws in India. We use the tagline ‘Simplifying Laws’. Our mission is to Simplify the Laws and make people aware of their rights and duties in relation to tax matters in order to equip them to participate in nation-building. TaxClue is a team of young professionals. We started in December 2016 with the mission of knowledge sharing. TaxClue would like to hear your valuable suggestion. Please write to our editorial team at info@taxclue.in

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