Govt extends income tax deadline under Vivad Se Vishwas scheme till Aug 31

As the coronavirus pandemic continues to affect people, the central government has extended the income tax payment deadline under the Vivad se Vishwas scheme by two months till August 31, 2021, without charging any interest.

As per the scheme, taxpayers won't be charged any interest if they pay income tax under the scheme on or before August 31, 2021. If taxpayers miss the deadline, an additional 10 per cent amount of the disputed tax would be charged. The last date of making a payment with an additional amount has been notified as October 31, 2021. It is a direct tax dispute resolution scheme announced in Budget 2020.

The government has granted further extension of timelines of compliances under Income Tax Act. It has also announced tax exemption for expenditure on COVID-19 treatment and ex-gratia received on death due to COVID-19.  The Centre has exempted tax on costs incurred during COVID treatment of an employee - borne by employers or any other person - for FY20 and later.

Also read: Is it a good idea to buy a house during the pandemic?

The government has also extended deadlines for several income tax compliances. Additionally, ex-gratia payments received from employers by the families of employees who lost their lives to COVID-19 would be exempt from income tax in FY20 and subsequent years, the finance ministry notified on Friday.  

The limit for such tax-exempted compensation would be Rs 10 lakh if received from any other person. The move comes as a relief to many taxpayers affected by the coronavirus pandemic.

In view of the impact of the COVID-19 pandemic, taxpayers are facing inconvenience in meeting certain tax compliances and also in filing responses to various notices. To ease compliances to be made by taxpayers during this difficult time, the Centre has extended deadlines linkage of Aadhaar with PAN, time limit for passing assessment order, compliances to be made by the taxpayers such as investment, deposit, payment, acquisition, purchase, construction or such other action, among others.

Also read: India has lost 776 doctors in 2nd Covid-19 wave so far: IMA