Revised Rules for Income Tax Provisions Applicable From October 2020

There are some consequential amendments made in the IT provisions by the CBDT about the expenditure and payments. The changes will be relevant from October 1 and would facilitate easiness for the taxpayers and assesses.

The new provision will affect many taxpayers, depositors, investors, and consumers concerning the timelines for filing the ‘Revised ITRs. There are also new procedure for debit and credit card payments by the users and security submission by the RBI.

The Guidelines Include the Following Important Points:

• Extension of time for filing revised ITRs: 

The problems faced by the consumers due to the coronavirus pandemic are global, and the CBDT has realized the same and has decided to extend the deadline for filing the belated or revised ITRs. For the assessment year 2019-2020, the consumers can furnish their ITR from September 30 till November 30.

Previously, the final date for submission of original and revised ITR was September 30. This initiative is taken by the Central Department of Direct taxes to provide some relaxation to the taxpayers’ adversity created by the pandemic.

• Guidelines on debit card and credit card:

The RBI has created new procedure regarding the usage and application for security of payments done by debit card and credit card. Such guidelines are practical from October 1, 2020. Payments covered by it will ensure-

1. At the customers’ request, permission will be granted for international dealings on the cards’ payments.
2. Customers will be given the option of whether or not to keep their cards operative. The customer can also block the business or cards which are not used for online payments.
3. Customers will be given the right to decide their expenditure limits on the cards.

• TCS for an amount over seven lakh on the foreign remittances:

1. A detailed explaining was issued by the CBDT on September 29, relating to the new requirements on TDS/TCS, which included the following points:
2. As per the Liberalised Remittance Scheme (LRS), only 5 % TCS will be applied on a foreign remittance exceeding seven lakh rupees in a monetary year. In addition to this, 0.5% will be applied on remittances for education loans.
3. On buying foreign country trip packages, a 5% TCS will be applied, disregard of the value as per the new standards. Also, 0.1% TCS applies to sales above 50 lakhs rupees in one year. Such companies will also be obliged to file their returns by the tenth date of the subsequent month, as per the new policy.
4. In case there is no submission of Aadhaar or PAN to the legalized dealer of the foreign exchange in a particular case, the TCS will be 10% instead of 5%. The travel machinist can collect the TCS in case of a foreign tour.
5. If the tax is paid in the form of TDS, but still TCS is imposed on the customer, it can be claimed as a compensation from the TCS.

• Health insurance standardization:

With the idea of reintroducing the scheme policies to cover the COVID-19 treatment expenses, the IRDAI issued precise procedure pertinent from the first day of October.

So, the medical expenditure associated to the coronavirus treatment has to be covered by the plans propelled after the date mentioned.

• Small savings plans’ interest rate won’t be affected:

For the quarter of FY 2020-2021, the prime rates on small saving schemes and PPF and NSC have remained unaffected. Therefore the PPF, NSC, Senior Citizens Savings Scheme, and Savings deposits would fetch the same rate of 7.1 %, 6.8%, 7.4%, and 4%, respectively, as it was in the preceding quarter.

Likewise, the rates on SSY, KVP, and RD will remain intact at 7.6%, 6.9%, and 5.8%, respectively.