Skip to main content

Make tax saving investments till June 30 - No confusion..!

Investors looking to make tax-saving investments are confused over extension of the March 31 deadline.

Due to the country-wide lockdown since 24th March 2020, the government has extended compliance related deadlines, which include the deadline for tax saving investment.

The source of confusion

Notably, amendments to Indian Stamp Act were to become effective from April 1 this year but the government notification extended the deadline to July 1. Meanwhile, a fake news about the extension of the financial year circulated on social media, following which the Ministry of Finance issued a statement. "There is some fake news circulating in some section of media that the Financial Year 2019-20 has been extended. A notification issued by the Government of India on 30th March 2020, with respect to some other amendments done in the Indian Stamp Act is being misquoted. There is no extension of the Financial Year."

This created confusion among investors looking to make tax-saving investments for the financial year 2019-20.

Can you make tax-saving investments after March 31?

Extending the deadline for investments does not require the government to extend the entire financial year by a quarter. So far specific deadlines have been extended which have been duly notified. "The tax relief package announced, extends the due date (31 March) for making tax-saving investments. However, the CBDT is yet to issue a notification specifying the amendments to the Income Tax Act," says Archit Gupta, Founder and CEO- Cleartax.

It means, unlike previous years, March 31 is not the last day for making your tax-saving investments. "The time for making tax-saving investments for the FY 2019-20 expires on March 31st, 2020. The government has granted relief by extending the deadline to June 30, 2020," adds Gupta. If you have any shortfall to match then you can make the investment by June 30 this year.

What should investors do?

If you cannot make investment online then you will have to visit the office of the financial institution to make the investment that is inconvenient given the restrictions on movement under the lockdown. Once the lockdown is relaxed, you will get ample time to make these investments until June. "Investors can use this additional window to make their tax investments. The government is expected to issue formal notification in this regard. We can expect that the operational guidelines will indicate that the employee has to choose the FY for which the benefit can be availed since the same investment cannot be used to avail benefits for two years," says Saraswathi Kasturirangan, Partner, Deloitte India.

However, many investments can be made online for which you do not have to wait for the lockdown to get over. Tax-saving fixed deposit is the most convenient option to fulfill the investment gap this year from the comfort of your home. Also, most banks allow their customers to open and make investment in PPF online. Similarly, if your KYC is done with the Sebi, you can make investment in ELSS funds also. Many banks also offer the facility to make NPS investment online. You may utilise these options to meet your tax-saving investment needs.

Know about us -  https://thetaxsupport.com
You can find more articles on at  https://vipin-sanger.blogspot.com
You can find tutorial videos on at https://www.youtube.com/c/vipinsanger
Labels:
Location: New Delhi, Delhi, India

Comments

Post a Comment

Popular posts from this blog

Small Businesses should use mobile apps for filing GST - 9 reasons Why..

GST and Taxation for MSMEs: GST accounting applications have helped in the transition of many small businesses and entrepreneurs in an easier and cost-effective manner to a new indirect tax system and also making them organised in terms of their bookkeeping. GST and Taxation for MSMEs: Since the launch of July 2017, Goods & Service Tax (GST) has been the most important factor for government and businesses with many changes being introduced recently. GST for Indian economy has been an evolving process and has brought advantages for small businesses in many ways by reducing complexities of inter-state taxation, digitization of MSMEs and an online portal for registration, filing and compliance purpose to make indirect taxation convenient and simple in India. There are about 13 million GST payers, out of which, 6-7 million are B2B, and 5-6 million are B2C. India’s MSME sector contributes about 8 per cent of India’s GDP, 45 per cent of the manufacturing output, 40 per cent of the ...
Post a Comment
Read more

TDS cut to benefit investors in equity mutual fund dividend plans

Investors in dividend plans of equity mutual funds will benefit from the 25% cut in the rates for tax deducted at source (TDS) announced by finance minister Nirmala Sitharaman on 13th May 2020. Tax experts said mutual funds are currently required to deduct a 10% TDS on dividends paid to unit holders. For the remainder of FY 2021 this will come down to 7.5%. The lower rates will come into effect from May 14 and include deductions on dividend, interest, professional fees and brokerage. Investors who route money through alternative investment funds (AIFs), real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), too would get the benefit of the lower TDS rate, say experts. REITs and InvITs are taxed in the same manner as debt instruments. The government had made dividends taxable in the hands of investors in the budget for FY 2021. “The unit holders will get the benefit of reduction of TDS on the dividend declared by mutual funds. This benef...
Post a Comment
Read more

TDS rate cut to leave professionals, equity investors with cash

The reduction in TDS/TCS is expected to boost cash flows by ~50,000 crore, the finance minister said on Wednesday while announcing the move as part of an economic package. The government’s move to reduce the rates of tax deduction at source (TDS) and tax collection at source (TCS) by 25% will benefit investors and professionals by putting more cash in their hands. While this doesn’t bring down the tax liability of taxpayers, it leaves more money with them during the course of the financial year. Individuals will still have to pay their tax liability -- every quarter, or annually. The reduction in TDS/TCS is expected to boost cash flows by ~50,000 crore, the finance minister said on 13th May, 2020 while announcing the move as part of an economic package aimed at reviving an economy roiled by the Covid-19 pandemic and the lockdown enforced to combat it. Usually, the payee deducts TDS or TCS on behalf of the receiver and deposits it with the government. TDS and TCS are met...
Post a Comment
Read more