Due Date for Income Tax Investments for Financial Year 2019-20 – 30th June or 31st March 20

The finance minister, Nirmala Sitharaman, at a press conference dated 24th March 2020 has announced that taxpayers have time until June 30, 2020 to complete their tax-saving exercise for FY 2019-20. The earlier deadline was March 31, 2020.

This   development came after the central government was appealed by various entities to extend the ITR filing date amid a lockdown in the country due to the rapid spread of coronavirus.

No doubt, it is a big relief to taxpayers, especially to those who usually do investments in last 10-20 days of the financial year .They were worried to miss the investments as due to closure and lockdown at various locations, it is not possible to venture out and make investments or even to make sure to deposit the minimum mandatory sum required.

 However, there is confusion among taxpayers, as to how, or whether, they can make investments in instruments like Public Provident Fund (PPF), NPS, National Savings Certificates (NSC), five-year Fixed Deposit to save tax even after March 31 to save tax for FY 2019-20. It is not clear if cut off investment date for all the tax-saving investments u/s 80C has been increased or not. Similarly, confusion is there regarding extension in date for voluntary contribution in Tier-1 Account of National Pension System (NPS) u/s 80CCD(1B), payment of health insurance premium u/s 80D as well as on making donations u/s 80G.

However, some confusion still remain even if the cutoff date for tax-saving investments for Financial Year (FY) 2019-20 is increased from March 31, 2020 to June 30, 2020.

For example, Mr X is yet to make his tax-saving investments for FY 2019-20, while Mr Y has completed his investments for the financial year. If both of them invest Rs 1 lakh each after the lockdown gets over, say on June 15, 2020. In that case, will the investments made on same day be treated differently for Mr A and Mr. Y? For Mr A, the investment made on June 15 , 2020 be treated as investment for FY 2019-20 and for Mr. Y , the investment made on same day be treated as investment for FY 2020-21?

Further, Cutoff date for mandatory contributions which are also considered as an eligible tax saving investments such as to EPF/NPS, child’s tuition fee etc, will still be March 31, 2020 as the financial year will end on this date only.

Experts are of view that in a given situation, it is practical and logical to extend due date for income tax investments for financial year 2019-20 as 30th June 2020.

A detailed clarification or Government Notification on tax-saving investments for FY 2019-20 is awaited.

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  1. Surinder Kumar Sharma says:

    SBI have charged a penality of Rs.50/-
    for delayed deposit in PPF (deposited on 04-04-2020) for FY 2019-2020, despite clear notification of extended period by 30-06-2020.

  2. S Mehta says:

    IT Department has not issued any notification regarding this. However, different CA firms has different views. What is the best alternatives?

  3. GD Jasuja says:

    “A detailed clarification or Government Notification on tax-saving investments for FY 2019-20 is awaited.”

    Your last para as above exposes the kind of uncertainty people are facing. On 31st March, 2020 i.e. the last day of the FY at 7.42pm also there waiting for clarification!!!!!

  4. Nilanjan says:

    Under changed circumstances what is the last date of filing 15G for fixed deposits in bank for the year ending March 2020?

    Earlier it was 15th April

  5. UC says:

    Good reading, Thanks.
    But why the example of Mr A and Mr Y.
    What if, Mr A invests for 80C (say in ELSS) for both FYs (say 50 K for this year and 150 K for FY21) in this period of Apr – Jun 20. Will he get benefit of 80C investment for both years.

  6. rugram says:

    You are right. The Govt. ought to have given clear instructions that banks/other entities through which people make their investments from 1.4.2020 onwards, should be accepted only if the depositors specify in writing on the relevant application forms, the FY in which they want their investments to be accounted for. Failing this, the intended investment should not be accepted. While acknowledging such investments, as also in all related entries/documents provided to the depositors, the accepting entities should clearly specify the FY in which these investments would be taken into account, in order to avoid future disputes between the depositors/entities/Govt. authorities.This should be done for all investments made from 1.4.2020 till 30.6.2020.
    These instructions should be immediately issued and communicated to the public, institutions, etc. and given wide publicity by the Govt. so that every one is clear about it.

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