Extension in ITR filing date: What would be the impact on 80C benefits?

By: |
March 25, 2020 8:39 PM

The last date for filing of ITR for the financial year 2018-19 has been extended to June 30, 2020 from March 31, 2020 for those assessees who have not filed their returns yet.

Coronavirus outbreak, Novel Coronavirus COVID-19, income tax, income tax return, ITR, financial year 2018-19, GST, wealth tax, STT, 80C deductions, NPS, 80CCD(1B), 80D, health insurance, 80G donation, tax-saving investmentsWithout the mention of any sections, it is not clear if cut off investment date for all the tax-saving investments u/s 80C has been increased or not.

To provide relief to taxpayers locked down to contain spreading of highly infectious Novel Coronavirus COVID-19, Finance Minister Nirmala Sitharaman has declared extension in the last date for filing of Income Tax Return (ITR) for the financial year (FY) 2018-19 to June 30, 2020 from March 31, 2020 for those assessees who have not filed their returns yet.

Along with the extension in the last date of filing ITR, the due date for linking PAN with Aadhaar and tax payment date under ‘Vivad se Vishwas’ scheme to avoid paying additional 10 per cent tax have also been extended to June 30, 2020.

Similarly, due dates for issue of notice, intimation, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and time limit for completion of proceedings by the authority and any compliance by the taxpayer including investment in saving instruments or investments for roll over benefit of capital gains under Income Tax Act, Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law etc, where the time limit is expiring between March 20, 2020 to June 29, 2020, have also been extended to June 30, 2020.

Without the mention of any sections, it is not clear if cut off investment date for all the tax-saving investments u/s 80C has been increased or not. Similarly, confusion is there regarding extension in date for voluntary contribution in Tier-1 Account of National Pension System (NPS) u/s 80CCD(1B), payment of health insurance premium u/s 80D as well as on making donations u/s 80G.

Against an online query on this issue, referring to the Press Release, CBDT Spokesperson Surabhi Ahluwalia told Financial Express Online, “As informed, investment in saving instrument is already covered.”

However, some confusion still remain even if the cutoff date for tax-saving investments for Financial Year (FY) 2019-20 is increased from March 31, 2020 to June 30, 2020.

Take for example, Anil is yet to make his tax-saving investments for FY 2019-20, while Ajay has completed his investments for the financial year. If both of them invest Rs 1 lakh each after the lockdown gets over, say on May 1, 2020. In that case, will the investments made on same day be treated differently for Anil and Ajay? For Anil, will the investment made on May 1, 2020 be treated as investment for FY 2019-20 and for Ajay, the investment made on same day be treated as investment for FY 2020-21?

“There is no other option, but they have to treat it this way,” said CA Karan Batra, Founder and MD of CharteredClub.com.

When asked, if extending FY 2019-20 beyond March 31, 2020 would help in removing such confusions, Batra said, “Extending financial year may lead to even more confusions.”

Although, you would get tax benefits u/s 80C on tax-saving investments made after March 31, 2020 till June 30, 2020, but for some eligible expenses, like – employees mandatory contribution to EPF/NPS, child’s tuition fee etc, the cutoff date will still be March 31, 2020 as the financial year will end on this date only.

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