Tax Saving Investments Extension & More: COVID-19

• Posted By Amritesh
• On April 15th, 2020
• Comments: one response

The crisis due to the spread of the deadly Coronavirus has lead to the extension of the lockdown period in India. The unprecedented scenario has lead to some confusion regarding the extension of Financial Year and availing Tax Saving investments for the Financial Year 2019-20. However, clarification has been issued pertaining to extension of Financial Year and availing tax benefits. Let’s understand the implication of the same in detail.

Income Tax Slab Rates FY 2019-20  

Key Points to Note: Tax Saving Investments & Financial Year

#Financial Year 2019-20 has not been extended, it ended on 31^st March, 2020.

#Income from period 1^st April, 2019 to 31^st March, 2020 to be taken into consideration for Tax filing  for Financial Year 2019-20.

#Belated Returns or Revised Returns for Financial Year 2019-20 may be filed till 30^th June, 2020.

#Income is taxable till 31^st March, 2020 for the Financial Year 2019-20. However, Deductions may be claimed by making the investment till 30^th June, 2020.

#Financial Year 2020-21, begins from 1^st April 2020.

Financial Year 2019-20: No Changes

#Financial Year followed by the Reserve Bank of India (RBI) is different to the one followed by the Government of India and other organizations. RBI follows July-June cycle whereas others follow April-March cycle. The April-March cycle is followed for the compliance purpose as well. RBI will adopt the April-March cycle from FY 2021-22. Hence, Fiscal Year 2019-20 will end on 30^th June, 2020 while Fiscal 2020-21 will begin on 1^st July, 2020 and end on 31^st March, 2021.

Thus, no extension or change in Financial Year for tax/compliance related purpose.

#For Financial Year 2018-19, last date of filing belated or revised return was 31^st March, 2020. Now it has been extended till 30^th June 2020. Late Fees under section 234F is still applicable if the Tax Payer fails to file income tax return on or before the due date.

#Interest on Late Filing of Income Tax return under section 234A has been reduced to 9% from 12% for the period 20^th March, 2020 to 30^th June, 2020.

Tax Saving Investments for Financial Year 2019-20

#In respect of FY 2019-20, Individuals who are yet to make tax saving investments in ELSS, PPF, NSC, etc will be allowed to do so till 30^th June, 2020.

#Investment in National Pension Scheme (NPS) for availing Income Tax Deductions for FY 2019-20 has also been extended till 30^th June, 2020.

#Investment made for Capital Gain exemptions U/S 54, 54EC, 54F has also been extended up to 30^th June, 2020.

Additional Relief

#Last Date for filing of GST Returns for March, April & May has also been extended till 30^th June, 2020.

#Home Loan interest accrued till 31^st March, 2020 will be eligible for tax deductions.

#No charges to be levied on ATM withdrawals from other Bank’s ATM till June 2020.

#Minimum Balance Fee charged by the Banks waived off till June.

#Banks have extended grace period to the Borrowers on loans and credit card dues for up to 3 months. However, Interest needs to be paid on the unpaid EMIs. The additional interest payment will increase the loan tenure or EMI amount. So Individuals need to evaluate their finances before availing such grace period. As it will add to the financial burden later.

Wealthtech Speaks or any of its authors are not responsible for any errors or omissions, accuracy, completeness, timeliness or for the results obtained from the use of this information. This article is for informational purpose only. Readers are advised to research further to have detailed knowledge on the topic. It is very important to do your own analysis and consult your Financial Advisor before arriving at any conclusion.