The country was under a complete lockdown for over two months, following the increase in cases of COVID - 19, a contagious disease that jolted the lives of people across the world. During this time, businesses and other economic activities came to an abrupt halt. It got people confined to their homes. All this happened around the start of the financial year 2020-21.
Paying bills, filing income tax returns, and making investments to save taxes are some responsibilities taxpayers need to fulfil. To ease their burden, given the lockdown scenario, the government had announced relaxations on income tax compliance by extending specific deadlines.
Let us take a look at the measures introduced to provide relief for taxpayers.
Individuals and entities are required to file income tax returns (ITR). The process of income tax filing in India has become convenient with the facility of e-filing. The filing of ITR on time saves a taxpayer from getting a penalty. He or she can claim a tax refund and apply for loans or credit cards.
As per the recent announcement by the government, taxpayers in India need not worry as the filing of original as well as revised ITR for AY 2019-20 (FY 2018-19) can be completed by July 31st, 2020. Besides, the government has extended the last date for ITR filing for the current assessment year (FY 2019-20) till November 30th, 2020. For the furnishing of the tax audit report, the deadline is now up to October 31st, 2020.
PAN is a vital identity proof for financial transactions. The income tax department has made it mandatory to link the PAN with Aadhaar; otherwise, the PAN would be considered inoperative. Many individuals became anxious as the deadline of June 30th, 2020, to link Permanent Account Number (PAN) and Aadhaar came closer. Now, the date has been extended until March 31st, 2021. Taxpayers in India can link PAN with Aadhaar through the SMS facility or by visiting the e-filing website of the I-T department.
Individuals who have been unable to repay their loans and pay credit card bills can stop worrying. According to the recent announcement by the Finance Ministry, they can defer the payment of any type of loan viz. personal loan, home loan, etc. In such cases, it would not be considered as default, and thus it will not impact the credit rating. The moratorium was allowed for the period March 1st, 2020 to May 31st, 2020. However, one should note that the interest charges would be levied. The Reserve Bank of India (RBI) has allowed extension of moratorium on EMIs for term loan till August 31st, 2020.
Investments for saving taxes had been extended up to June 30th, 2020. It also means that the health insurance premium paid up to this period will qualify for income tax deductions, for the financial year 2019-20. For a person investing in schemes such as Sukanya Samridhi, National Pension System (NPS), and PPF, there is a specified amount to be deposited during a financial year. The deadline for making investments in such tax-saving schemes and expenditures to claim tax benefits and for making investment declaration by employees has been extended till July 31st, 2020.
The TDS and TCS Certificates are vital documents required for income tax filing in India. The last date for furnishing of TDS/TCS statements pertaining to FY 2019-20 had been extended up to July 31st, 2020. The last date for issuance of TDS/TCS certificates pertaining to FY 2019-20 is now till August 31st, 2020.
This measure will benefit taxpayers with self-assessment tax liability up to Rs 1 lakh. Owing to the financial impact caused by the lockdown, the government decided to extend the due date for self-assessment tax payment till November 30th, 2020. Self-assessment tax is the balance tax amount to be paid by an assessee on the assessed income after considering the TDS and advance tax.
One can claim capital gains deduction for the financial year 2019-20 on the investments, purchase or construction of house up to September 30th, 2020. The provision is under Sections 54 to Sections 54GB of the Income Tax Act.
The Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES) had been introduced to support the relief operations carried out during the pandemic. The amount donated towards PM CARES would be eligible for a 100 percent tax deduction under Section 80G of the I-T Act. It will be applicable only in case a person selects the old tax regime with tax deduction. One can claim a tax deduction in the FY 2019-20 (AY 2020-21) on contributions made between April 1st, 2020 and June 30th, 2020.
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It is crucial to be aware of the income tax laws in India. It will ensure that taxpayers do not miss out on any benefit available to them.
Given the extraordinary circumstances, it is wise to prepare oneself financially by making the right decisions. One should realise that unforeseen expenses can negatively impact on a family’s savings. Protecting the hard-earned savings should be a priority. Setting an emergency fund, planning for retirement, and securing health by opting for medical insurance are some useful tips to follow for a secure future.
You can save tax by claiming tax deduction under Section 80D of the Income Tax Act, 1961 on the premium paid for a health insurance policy. Visit the website of Care Health Insurance to know about the various health policies and their numerous benefits. Secure your health today and lead a financially secure future.
Disclaimer: The above information is for reference purposes only. The tax exemptions are subject to the rules and regulations of the Income Tax Act of India 1961.
>> Also Read: A Guide to Avail Tax Deduction under Section 80DDB
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