Update on the financial year 2019-20

1) FY 2019-20 is not at all extended till 30th June, only the date is extended for some compliances.
Fact: Financial year closure is not extended. Only the date of compliance which was required by 31st March 2020 either by the taxpayers or by the tax authorities has been deferred till 30th June 2020.

2) Belated returns or Revised returns for the FY 2018-19 can be filed till 30th June.
Fact: All taxpayers who have not filed the return of income of FY 2018-19 can file or revise the return till 30th June 2020. In the normal course, the belated income tax return cannot be filed after the end of the relevant assessment year. However, due to lockdown till 14th April, Government is allowing the filing of return of FY 2018-19 (AY 2020-21) till 30th June. Readers may note that earlier there was a period of 2 years for filing or revising the return which is reduced to 1 year earlier.

3) In the FY 2019-20, income is taxable till 31st March only and not up to 30th June, i.e. for taxability of income financial year is considered till 31st March only.
Fact: The income of the FY 2019-20 (i.e., till 31st March 2020) will be taxable for the FY 2019-20.

4) Deductions under 80C, 80D, etc. can be claimed by investing till 30th June.
Fact: Investment in PPF/LIC etc which are eligible for deduction u/s 80C and mediclaim payment for claiming deduction u/s 80D can be done till 30.06.2020.

5) New LIC, mediclaim, PPF, NPS, etc. policies taken till 30th June will be eligible for the deduction for the FY 2019-20.
Fact: There is a restriction of Rs. 1.50 Lakh for deposits in the PPF A/c in one year. If the person has not deposited any amount in the PPF Account till 31.03.2020 and if he deposits it in between April to June 2020 then surely he will be eligible for deduction u/s 80C in the FY 2018-19. However, as per the present PPF rule, such a person may not be able to invest again Rs. 1.50 Lakh for the FY 2020-21 as there is a yearly ceiling of Rs. 1.50 for deposit in the PPF Account. To take care of this situation, the Government needs to amend the PPF rules to provide that Rs. 3 Lakh in aggregate can be invested for the FY 2019-20 & 2020-21.

6) Payment of Premium of old policies of LIC, mediclaim, PPF, NPS, etc. due up to 31st March can be claimed as deduction even if paid till 30th June.
Fact: If the person pays the premium which is due in April – 2020 and if he makes the payment of the same before 30.06.2020 then he can get a deduction in the FY 2019-20 (AY 2020-21). Only the payment of such policies which has become due before 31st March would be considered for deduction.

7) Housing loan interest is eligible for deduction on an accrual basis, so interest accrued till 31st March will be eligible for the deduction in FY 2019-20. However, Installments due up to 31st March can be claimed as deduction even if paid till 30th June.
Fact: If a person deposits the amount from April to June 2020 in his housing loan account then he would be eligible for deduction u/s 80C subject to the condition that the amount is due till March – 2020. It may be noted that interest on housing loan is eligible for deduction on an accrual basis and not on a payment basis. All interest which is due till 31st march 20 even if not paid(even till 30th June 20) is eligible for claiming in a.y.20-21 itself. that way this is not specific to current extension as it is there in the section for all years.

Latest Updates

  • Navigating Income Tax Filing with Multiple Income Sources
    Navigating Income Tax Filing with Multiple Income Sources Starting early on tax preparations, especially when managing multiple income sources, is crucial. Choosing the right ITR form is the first step towards accurate tax filing, which is particularly important for freelancers, moonlighters, and others with diverse income streams. Simplifying Tax Filing for […]
  • Understanding Taxation of Dividends from Shares and Mutual Funds
    Understanding Taxation of Dividends from Shares and Mutual Funds As the deadline for filing income tax returns approaches, clarity on the taxation of dividends received from investments in shares and mutual funds becomes crucial. The rules surrounding dividend taxation underwent significant changes with the Finance Act, 2020, which abolished the Dividend Distribution Tax […]
  • Understanding Capital Gains Tax on Equity and Mutual Funds
    Understanding Capital Gains Tax on Equity and Mutual Funds Investing in equity and mutual funds can significantly enhance your wealth but also entails tax obligations on capital gains. Capital gains tax is levied on the profit earned from selling investments like equity shares or mutual funds at a higher price than their purchase […]
  • The Importance of Verifying Your Income Tax Return
    The Importance of Verifying Your Income Tax Return Filing your Income Tax Return (ITR) is just the first step in the tax process. To ensure your return is valid, you must electronically verify it within a specific timeframe, usually 30 days, as mandated by the Income Tax Department. Verification can be […]
  • How to Check Income Tax Refund Status for 2023-24
    How to Check Income Tax Refund Status for 2023-24 As the deadline for filing income tax returns for the financial year 2023-24 approaches on July 31, many taxpayers are eagerly awaiting refunds on excess taxes paid. If you’ve already filed and verified your returns, you can easily monitor the status of […]
  • Why You Should Verify Your Income Tax Return Within 30 Days of Filing
    Why You Should Verify Your Income Tax Return Within 30 Days of Filing As the deadline for filing income tax returns (ITR) approaches on July 31, taxpayers are busy gathering the necessary documents. Once you’ve filed your tax return, it’s crucial to verify it within 30 days. The Income Tax (I-T) […]
  • High-Value Transactions That May Attract Income Tax Department Notices
    High-Value Transactions That May Attract Income Tax Department Notices To streamline the tracking of high-value transactions, the Income Tax Department has set up agreements with various government agencies and financial institutions. It’s crucial for taxpayers to be aware that substantial cash transactions exceeding specific limits are under the watchful eye of […]
  • Expedite Your Income Tax Refunds: Pre-validate Your Bank Account
    Expedite Your Income Tax Refunds: Pre-validate Your Bank Account As the income tax return (ITR) filing season of 2024 progresses, many taxpayers are keenly awaiting their refunds. To ensure a smooth and speedy refund process, one crucial step is often overlooked—pre-validating your bank account. Why Pre-validate Your Bank Account? Pre-validating your […]
  • 10 Easy Ways to Save More Tax This Year
    10 Easy Ways to Save More Tax This Year Tax season is upon us again, and maximizing tax savings is on everyone’s mind. Navigating the complexities of income tax filing can be challenging, but there are numerous strategies to help Indian citizens claim deductions and reduce their tax burden. Here are […]
  • Steps to Correct Errors in Annual Information Statement for ITR Filing
    Steps to Correct Errors in Annual Information Statement for ITR Filing As the deadline for filing Income Tax Returns (ITR) draws near, some taxpayers may notice discrepancies in their Annual Information Statement (AIS). The AIS is a detailed record of financial transactions necessary for ITR filing. Errors in the AIS can […]