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Dont miss to claim the deduction of tax saving investments for FY 2019-20, done after 31st March 2020-

In view of COVID 19 outbreak and consequently to the challanges faced by taxpayers in meeting the deadlines for various compliances, last date for different investments for Tax Savings for Financial Year 2019-20 was extended till 30th June 2020 which is now further extended till 31st July 2020. As a result many of you  must have made some investments after 31st March 2020. Its important to understand the impact of extension of deadline and the dos & donts for investments made during 31 March 2020 to 30th June 2020 & further till 31st July 2020.

What are the Investments covered under extended deadline of 31st July 2020:

Lets first understand what are the Investments covered under the extended Deadline:
  • Investments for Tax Saving like PPF, Life Insurance Premium, ELSS, PF etc. to be claimed U/S 80C with in the overall limit of Rs. 150000
  • Mediclaim Insurance premium to be claimed U/S 80D
  • Various donations like PMNRF, PM CARES Fund, Donations to NGOs and other eligible organisations qualifying for deduction U/s 80G
  • Investments in House Property/Bonds for claiming deductions U/s 54 to 54G against Long term/ Short Term Capital Gains.

Important point to be kept in mind when some investments are done after 31st March 2020:

For final TDS calculations generally investment proofs for tax savings are submitted to employers in the month of January or February so that total amount of due taxes are deducted and March salary is adjusted accordingly. Its not possible for employers to consider the investments done after March 31st and recalculate the amount of TDS, as Salary of March is already paid.

This is the reason that you have to be careful and aware that the investments done after 31st March 2020 for the FY 2019-20 will not be there in your Form 16, however such Investments can be declared in your Income Tax Return for FY 2019-20 (AY 2020-21).

Whatever extra TDS is deducted by your employer can be claimed as Income Tax refund in your Income Tax Return. The point to be kept in mind is dont miss to claim the tax savings of FY 2019-20 done after March 31st 2020 while filing your Income Tax Return.

Interesting Fact:

Investments done between March 31st 2020 to July 31st 2020 can be claimed either in Financial Year 2019-20 or in Financial Year 2020-21.
So if your limit of Rs. 150000 for Financial Year 2019-20 is exausted, the remaining investments can be considered in FY 2020-21. But remember that investmets once claimed in FY 19-20 can not be claimed again in FY 20-21. Simply any investment can not be claimed twice.

You have an option to utilise the investments done between March 31st 2020 to July 31st 2020 in any one financial year ie. either in FY 2019-20 or in FY 2020-21 as per your requirement.

Extension in deadlines is only for above investments. The financial year 19-20 is not extended. Financial year 19-20 has already ended on 31st March 2020.

Various exemptions from Long Term Capital Gains
All about deduction u/s 80D - Mediclaim Insurance
Equity Inlked Savings Scheme
All about Public Provident Fund- PPF
Donation to PMCARES Fund Deduction u/s 80G
Donation to Prime Ministers National Relief Fund

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