tax saving deadline: Tax-saving investments for FY 2019-20 allowed till June 30, 2020

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The government on March 24, 2020 announced that taxpayers have time until June 30, 2020 to complete their tax-saving exercise for FY2019-20. The earlier deadline was March 31, 2020.

The finance minister, Nirmala Sitharaman, at a press briefing said , “Due dates for issue of notice, intimation, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and time limit for completion of proceedings by the authority and any compliance by the taxpayer including investment in saving instruments or investments for roll over benefit of capital gains under Income Tax Act, Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law, Equalization Levy law, Vivad Se Vishwas law where the time limit is expiring between 20th March 2020 to 29th June 2020 shall be extended to 30th June 2020.”

Good news for taxpayers

According to chartered accountants this means that individuals can complete their tax-saving exercise for financial year 2019-20 by June 30, 2020.

Sonu Iyer, Tax Partner & National Leader- People Advisory Services, EY India, says, “Taxpayers who were anxious about missing the due date of March 31, 2020 for investing in tax savings instruments to claim tax relief may breathe easy as the Finance Minister has extended the time period to do so until June 30, 2020. We will need to review the fine print of the Amendment Act or the ordinance to be certain of these interpretations.”

Due to the spread of coronavirus, many banks are working with skeletal staff and are offering only essential services. With effect from March 23, only these banking services will be available at bank branch: cash deposit and withdrawal, cheque clearing, remittances and government transactions. The whole gamut of banking services are only available on digital channels.

Similarly, mutual fund houses have also shut down their offices and have asked investors to use only online facilities to transact.

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.

Archit Gupta, Founder and CEO, ClearTax says, “It appears that the tax saving investments in ELSS, PPF and NSC etc. shall be allowed to be made till June 30, 2020. Usually, there is heavy rush in the last few days of March for making deposits in schemes like PPF. Due to closures and lockdowns, many taxpayers may have missed this deadline. An extension such as this, will be a big relief to taxpayers. Allowing only minimum contributions only for compliance may not be enough in the given circumstances.”

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