The Central Board of Direct Taxes (CBDT) recently issued two circulars addressing the updates on condonation delay in filing essential forms under the Income Tax Act. These circulars provide relief to taxpayers and clarify procedural guidelines for claiming exemptions and reduced tax rates.

Key Updates on Condonation of Delay for Tax Forms 

Key Updates in Circular No. 16/2024

Circular No. 16/2024, issued on 18 November 2024, focuses on condoning delays in filing Forms 9A, 10, 10B, and 10BB for AY 2018-19 and subsequent assessment years. These forms are critical for charitable and religious trusts, as well as educational and medical institutions, to claim tax exemptions under Sections 11 and 12 of the Income Tax Act.

Key Provisions:

1. Scope of Application:
   • Applications for any delay will be accepted.
   • Authorities such as Pr. CsIT/CsIT can handle delays up to 365 days, while Pr. CCsIT/CCsIT/DGsIT are authorized for delays beyond 365 days.
2. Conditions for Approval:
   • Reasonable C ause: Taxpayers must provide valid reasons, such as medical issues (with certificates) or technical glitches (with screenshots).
   • For Form 10: Investments must comply with Section 11(5).
3. Timelines:
   • Applications must be submitted within three years from the end of the relevant assessment year.
   • Cases for AY 2018-19 to AY 2020-21 are unaffected if applications were filed before this circular and are pending.
4. Resolution Timeline:
   • Competent authorities are encouraged to dispose of applications within six months of receipt.

Forms at a Glance:

• Form 9A: For carrying forward unutilized income.
• Form 10: For accumulating income for specific purposes.
• Form 10B: Audit report for trusts/institutions under Section 12A(b).
• Form 10BB: Audit report for educational/medical institutions under Section 10(23C).

Key Updates in Circular No. 17/2024

CBDT also issued Circular No. 17/2024 on 18 November 2024, addressing delays in filing Forms 10-IC and 10-ID, which relate to reduced corporate tax rates introduced in 2019.

Reduced Tax Rates Overview:

• 22% Rate (Section 115BAA): Available to domestic companies meeting specified conditions and filing Form 10-IC.
• 15% Rate (Section 115BAB): Available to new domestic manufacturing companies incorporated on or after 1 October 2019, provided production begins by 31 March 2024, and Form 10-ID is filed.

Conditions for Condonation:

1. Return Filing: The return for the relevant year must be filed on or before the due date under Section 139(1).
2. Opted Tax Regime: The taxpayer must declare the choice in Part A-GEN of ITR-6.
3. Reasonable Cause: The taxpayer must show that the delay was due to valid reasons and resulted in genuine hardship.

Significance for Taxpayers – Updates on Condonation Delay in Tax Forms

These circulars reinforce the principle of fairness in tax administration by addressing genuine hardships faced by taxpayers. They also standardize the process for condonation of delays, ensuring timely and transparent resolution of pending cases.

By providing clear instructions, the CBDT has extended support to entities seeking tax benefits and reduced corporate rates, fostering compliance and trust in the system.

Stay compliant with Pitchers Global as we make sure you know everything about the latest updates on condonation of delay in Tax forms.

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