It is important for taxpayers to understand the impact of the relaxations in income tax compliances announced by the government.
The closure of every Financial Year (FY) and the commencement of the next is the time when most individuals think about their income tax obligations. For FY 2019-20 things have become more complex given the lockdown situation. Investing to save taxes, filing belated income tax returns of FY 2018-19 or revising income tax return to amend or rectify an error in previously filed tax return for FY 2018/19 and budgeting for FY 2020-21, are some of the pressing issues for an individual taxpayer. It is important for taxpayers to understand the impact of the relaxations announced by the government.
The major relief has been in the form of extension of due dates for filing income tax returns belated or revised for FY 2018-19, and providing additional time for investing in tax relief eligible investments for FY 2019-20. The due date is now June 30, 2020 for all of this.
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Let us see how this would help taxpayers.
1. Investments for the FY 2019-20
Individuals can now use the extended window up to 30 June, to make tax saving investments such as contributions to PPF, NSC etc and can claim benefits under Section 80C for FY 2019-20. Similarly, insurance premium payments for medical coverage for self, family and/or senior citizen parents, paid-up to the period ending 30 June 2020, are also available as deductions for FY 2019-20. Relaxation has also been provided to savings schemes such as PPF, Sukanya Samridhi, where specified minimal amount of deposit is to be made during each FY. Individuals who were planning to contribute to NPS but did not manage to do so by March 31, 2020, now have the opportunity to do so with the extended timeline.
Source: Financial Express
