If you have missed the opportunity to make full tax-saving investments or failed to make minimum investments till March 31, you may do so till July 31, 2020.
In case you have missed the opportunity to make full investments to claim maximum tax benefits or failed to make minimum investments to keep Public Provident Fund (PPF), Sukanya Samriddhi Yojana and/or National Pension System (NPS) accounts etc active due to the COVID-19 lockdown, the good news for you is that the Central Board of Direct Taxes (CBDT) has extended the deadline for tax-saving investments Chapter-VIA for the Financial Year (FY) 2019-20 further from June 30 to July 31, 2020.
“The date for making various investment/ payment for claiming deduction under Chapter-VIA-B of the IT Act which includes section 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (Donations) etc. has also been further extended to 31st July, 2020. Hence the investment/ payment can be made upto 31st July, 2020 for claiming the deduction under these sections for FY 2019-20,” says the June 24, 2020 CBDT Press Release.
The deadline was earlier extended from March 31, 2020 to June 30, 2020 as the FY 2019-20 ended in the midst of the nationwide lockdown, making it difficult for many taxpayers to complete investments before the end of the Financial Year.
The maximum tax benefits available u/s 80C is Rs 1,50,000, u/s 80CCD(1B) for voluntary investment in Tier-1 Account of NPS is Rs 50,000, u/s 80D for payment of health insurance premium is Rs 25,000 and the limit for senior citizens is Rs 50,000 and combined limit (on premium paid by a senior citizen assessee for self/family and his/her senior citizen parents) is Rs 1 lakh.
The benefits of extended deadline may also be used to ensure that the accounts like PPF, SSY, NPS etc don’t get deactivated, where minimum annual investments are mandatory to keep the accounts active.
The minimum annual investment needed to keep a PPF Account active is Rs 500, for SSY, it’s Rs 250 and for NPS, it’s Rs 1,000.