Tax Relief In Disaster Situations

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Tax as known by all is a mandatory extraction by the government in lieu of public services provided by the government. It is levied with an objective of equal distribution of wealth amongst the masses. To help the needy, tax is charged in a manner that aims to extract the best ounces from the fraudulent and then the rich. Tax or fine is also imposed for not following government rules and regulations. But don’t you think it’s the duty of our government to relieve its citizens when they are in pain? 

Well, sure it is and our government fulfills the same with utmost dignity and respect. To all those in vain and surrounded by grief in cases of emergent situations that may develop upon a nation, the government support system relaxes the tax liabilities.

Covid 19 scenario gave way to various policies of tax relief, like reduction in TDS rates for a variety of services by 25%. 

In the USA Income tax policies were altered from scratch to provide major reassurance to our citizens via schemes like IRS Tax Relief 2021, and Natural Disaster Tax Deduction 2021

Some of the relaxations in the tax implications during the tough times of Covid are listed below 

  1. The due date for Online Filing of Income Tax Return for FY 19-20 was extended to 31st December 2020. For FY 20-21 the date was extended to 31st December 2021 from the regular annual date of 31st July’2021
  1. Tax Deduction at Source ( TDS) rates and penal interest rates were reduced under various laws and provisions keeping in mind the crucial situation. Also, Late Filing fees under Income Tax Act 1961 and GST Act were reduced.
  1. The CBEC postponed deadlines for filing of goods and services tax (GST) returns and related payments of GST. 
  1. To claim Chapter VI Deductions commonly known as 80C Deductions the last date for making payments of premiums was extended to 30th June’20 from 31’st March 2020. The main aim was to relieve the people of the stress of submissions and also ease them in case of penalties for late and delayed returns.
  1. A new Tax Dispute Resolution Scheme was also introduced, allowing an option to settle tax when a percentage is paid by 31 st March 2020. The due date for making Tax Payments under this scheme was extended to 30th September 2021 by the CBDT. This helped the tax-paying portion of our nation to settle their liabilities in a more flexible time structure. 
  1. Taxpayers received huge financial help from their employers for meeting their medical expenses in the wake of lockdowns. Taxpayers have been exempted from income tax for any amount received from their employers or any person for treatment of Covid 19 during FY 20-21 onwards
  1. The corporates have been exempted from taxes on medical expenses incurred by them for their employees or any other person.
  1.  Taxpayers who lost their life due to Covid-19, their families were provided with relief. It has been decided to provide an income-tax exemption to ex-gratia payments received by family members from the employer of the deceased person or the government.
  1. Certain investments or payments to be made by the taxpayers such as investments, deposits, payments, acquisition of residential property, or such other action, by whatever name called, to claim any exemption, the deadline for the same had been extended up to 30th September 2021.  
  1.  GSTR 9 and 9C due dates for the FY 20-21 has been extended to 28th February ’22 from 31st December’21
  2. Due dates for completion of ROC Filings to be done with MCA has also been further extended to 15th February ’22 for AOC-4 form and to 28th February’22 for MGT-7 form.

Direct and Indirect taxes both form a financial burden on the final consumer. The pathway to filing returns and payment of taxes is not less complicated. In the vision of a drastic situation where people were fighting for their lives and their family, it wasn’t fair of the political heads to think about collecting revenues from the people. Tax relief in disaster situations was considered a necessity. It was the need of the hour to be generous and give away what they could. This perception led them to abolish many such liabilities and burdens of the minds of citizens of the country. Reduced rates, extended deadlines, and easy online filings helped the tax-payers adjust their responsibilities and concentrate on what’s important, Health and Family!