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Various deadlines related to Income Tax which was to end on 31st March have now been extended to 30th June, giving respite to the taxpayers. Finance Minister Nirmala Sitharaman announced the extension of the deadlines looking at the circumstances related to COVID-19. There was significant pressure on the part of the Government for the extension of various deadlines. Both the Government and the RBI has announced varied relief measures to minimise the effect of coronavirus on financial markets, investors, taxpayers, investors and the common man, amongst others. The Finance Minister, at a press conference dated on 24th March 2020 announced that taxpayers have time until 30th June 2020 to complete their tax-saving exercise for Financial Year 2019-20. The earlier deadline was 31st March 2020.
This announcement bought relief to taxpayers, especially to those individuals who usually invest in the last 10-20 days of the financial year. They were worried about missing the investments due to closure and lockdown at various locations, and it is not possible to venture out and make investments or even to make sure to deposit the minimum mandatory sum required. Hence, by extending a tax saving investment date, the government has helped taxpayers in various ways.
Table of Contents
The Government has issued an ordinance on 31st March, 2020 to bring into effect compliance relief measures for taxpayers in the wake of Covid 19 that was announced by the Finance Ministry on 24th March, 2020. Tax Saving investment date has been increased in various government schemes. The key points in the ordinance are as follows:
The Government clarified that it has not extended the current financial year 2019-20; it will end as scheduled on 31st March. Only the tax saving investment date has been extended. Industry persons have been demanding extension of fiscal year by three months in view of the economic impact caused by outbreak of Covid-19.
Individuals can complete their tax-saving investments for the financial year 2019-2020 by 30th June 2020. It is a big relief for taxpayers as the due date has been extended.
Banks in this time of crisis are working with very limited staff, which is providing only essential services. From 23rd March, the services offered by the bank will be limited to: Cash deposit and withdrawal of cash, cheque-clearing services, and Government transactions along with remittances. The mutual fund houses have asked their investors to use only the online transactions as their offices are closed, due to the ongoing lockdown declared by Government.
The extension will provide relief to especially those senior citizens and individuals who are not comfortable using online facilities to transact and are yet to complete their tax-savings for FY 2019-20.
The finance ministry has clarified that the last date for closing of financial year is still the same i.e 31st March, 2020. Hence the calculation of tax will be based on income you have till 31st March, 2020.But the government has failed to clarify on some issues like the cut off investment made under Section 80 C has been increased or not. Also, there is a confusion in the extension date made in voluntary contribution made in National Pension System or NPS as under Section 80 CCD (1B), contribution made in payment of health insurance premium as per Section 80D and on donations made under section 80G.
Also, Read: How a Person can Save Tax in India?.
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