The finance minister, Nirmala Sitharaman, at a press conference dated 24th March 2020 has announced that taxpayers can complete their tax-saving exercise and statutory compliances for FY 2019-20 till June 30, 2020. The earlier deadline was March 31, 2020. It’s a big relief to the Taxpayers given by the government. But still, it has a lot of clarifications needed by the government which are awaited in this regard. This also created lots of rumours that FY 2019-20 had been extended till June 30, 2020, which was later clarified that it was misinterpreted and no extension had been done.

At the same time, there was a lot of confusion as RBI in its Board meeting recommended aligning its financial year which is July-June with the government’s Financial year April-March from 2020-21 and forwarded the proposal to the government which was later finalised by Central board of RBI that Fiscal Year 2021-22 of RBI will start from April 2021. This was just an old recommendation which was approved it was not at all in relation with the current Coronavirus pandemic.

As the date for claiming deduction under section 80G of the IT Act has been extended up to June 30, the donation made up to that date will also be eligible for deduction from income of FY 2019-20. Anyone contributing to PM CARES Fund (Prime Minister’s Citizen Assistance and Relief Emergency Situation Situations Fund) will get full benefit under the Income Tax Act.

Hon’ble PM has taken a very good initiative of setting up the PM CARE Fund as a public charitable trust to motivate people to contribute to a cause that has threatened humanity across the globe and to raise resources required for fighting the coronavirus crises.

Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020’ was enacted to make new norms effective for ease of compliance-related with Income Tax and GST (Goods & Services Tax) on March 24, 2020, to provide relief to income tax and GST assesses affected by COVID-19 and combat against this health crises. In light of this ordinance, certain provisions of the Income Tax Act has been amended to provide the tax relief. Therefore, 100% deduction under Section 80G of the Income Tax Act is made available for the donation made to the PM CARES Fund. Further, the limit on the deduction of 10% of gross income shall also not be applicable for donation made to PM CARES Fund.”

With the promulgation of the Ordinance, there is an extension for the last date for linking Aadhaar and PAN to June 30. The date for making various investment or payment for claiming deduction under Chapter-VIA-B of IT Act which includes Section 80C such as LIC, PPF, NSC, 80D (Mediclaim), 80G (Donations), among others has been extended to June 30, 2020. Hence the investment or payment can be made up to June 30 2020 for claiming the deduction under these sections for FY 2019-20.

Hence any person including the corporate paying concessional tax on the income of FY 2020-21 under new regime can make donations to PM CARES Fund up to 30.06.2020 and can claim donation under Section 80G against income of FY 2019-20 and shall not lose his eligibility to pay concessional taxation regime for the income of FY 2020-2021.

The date for making an investment, construction or purchase for claiming rollover benefit or deduction in respect of capital gains under sections 54 to 54GB of the IT Act has also been extended to June 30, 2020. Therefore, the investment or purchase made up to June 30, 2020 shall be eligible for claiming deduction from capital gains arising during FY 2019-20. With this ordinance, the date for passing of order or issuance of notice by the authorities under various direct taxes and ‘Benami’ law has also been extended till June 30. It also puts into effect the government’s decision to extend durations of the dispute settlement schemes for direct taxes (Vivaad Se Vishwas) and indirect taxes (Sabka Vishwas) till June 30.

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