There were already some important changes coming to how you pay your taxes, and then with less than a month before the traditional Tax Day, the IRS switched things up again. Due to the COVID-19 pandemic, the federal government extended this year’s federal income tax filing deadline.
For companies and firms whose accounts are required to be audited, this deadline is October 31. But keeping in mind the facilities of the taxpayers, these dates have now been extended.
The Income Tax Department has extended the deadline for filing IT returns for the financial year 2020-21 due to the Corona epidemic. This will not only provide great relief to the individual taxpayers but will also reduce the burden of compliance on the businessmen facing difficulties in the current environment.
According to the Income Tax Rules, individual taxpayers who file ITR-1 or ITR 4 for the previous financial year (2020-21) ended March 31, have to do so by July 31. For companies and firms whose accounts are required to be audited, this deadline is October 31. But keeping in mind the facilities of the taxpayers, these dates have now been extended.
An assessee who does not submit a return of income within the deadline is allowed to file a belated return but with a penalty. For filing a belated or revised return of income, the due date is now January 31, 2022.
A taxpayer who has not submitted his return by the deadline can file a Belated ITR, but he will be charged a penalty for doing so. The deadline for filing a Belated ITR or Revised ITR has been extended to January 31, 2022.
The CBDT has also extended the deadline for submitting Form 16 to be supplied by the employer to the employee till July 15, 2021, according to a circular. Its previous deadline was June 15th.
The government has started a new tax system for taxpayers from 1 April 2020. It is important to understand what will change under this new tax system, for which taxpayer it is beneficial and who should not opt for it. First, understand what is in the new slab.
- No tax to be paid on income up to Rs 2.5 lakh per annum
- The annual income of Rs 2.5 lakh to Rs 5 lakh will attract a 5% tax
- The annual income of Rs 5-7.5 lakh will attract a 10% tax
- 10 percent tax will be levied on annual income of Rs 7.5-10 lakh
- The annual income of Rs 10-12.5 lakh will be taxed at 20%
- The annual income of Rs 12.5-15 lakh will attract a 25% tax
- Annual income above 15 lakh will have to pay 30% tax
Taxpayers can move from the old tax slab to the new slab and they can come back from the new slab to the old slab. However, this exemption is only for certain categories of taxpayers. Employees can come back by going to the new slab. Employees can switch tax slabs every financial year. Those who have income from salary, rent, or other sources, can change the tax slab every time. If you have income from the business then you can shift only once. Businessmen once switched cannot come back.
If you are a doctor, lawyer, engineer, or chartered accountant then you can come under the new scheme. The special thing is that you can choose between a new or old scheme every year.