Reminder — You have time till June 30 to make tax-saving investments for the last financial year
Finance MinisterNirmala Sitharam announced that Income taxfiling has been deferred for another three months till 30 November.
- This gives you more time to make your
tax-saving investmentsbefore your company or employer asks for Form-16 details.
- Archit Gupta, Founder and CEO of ClearTax told Business Insider that the coronavirus lockdown was announced right around the time people usually rush to complete their investments — leaving many in a bind.
“The lockdown was announced on 25 March. But, if you look at historical data, there’s a huge rush in the last 10 days of March, when people start to renew their policies, make their PPF deposit, or other mandatory investments to close,” Archit Gupta, Founder and CEO of ClearTax told Business Insider.
The coronavirus lockdown threw a wrench in many an employee’s plans when they suddenly found themselves unable to go to the bank to make their deposits or make the requisite investments that they had planned. After all, the new no-stress tax regime was only going to kick in in the next financial year.
After extending the deadline to file tax returns to July 2020 in the first set of relief measures announced by India’s Finance Minister
This means you have another three months to make your investments before the government asks for its annual tax cut from your salary. “On the due date extension, for your tax savings in FY19-20, you have been given an additional quarter to make tax-saving investments,” said Gupta.
So, how will you file income tax come November?
Right, the deferment is a boon for companies as well. “Even employers haven’t been able to access their workplaces and prepare their Form-16. Especially those who don’t use cloud services,” explained Gupta.
So, once the deadline finally comes up — provided if they don’t extend it yet again depending on how the coronavirus lockdown plays out — Gupta expects that companies will ask you if you have made any new investments in the past three months. At that time, you’ll have a choice. You can either claim a particular deduction for the financial year 2019-20, or for 2020-21. Some may choose to opt for the latter if they have already exhausted their deductions prior to the lockdown.
“The Income Tax Act says that you cannot claim the same deduction twice,” said Gupta. So, keep in mind, if you claim a particular deduction for the financial year 2019-20, then you won’t be able to claim in 2020-21 — given that you’re not switching over the new “simplified” tax rates.
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