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.