Investment and related payment can be made up to 30th June 2020 for claiming the deduction under 80C, 80G, 80D sections for FY 2019-20.
The outbreak of Novel Corona Virus (COVID-19) across the globe has impacted people and businesses, causing loss to the lives of people, livelihood etc. Considering social distancing as an important move to control the spread of crisis, the union government had earlier announced a complete lockdown in the country. Keeping in view the challenges faced by taxpayers in meeting the compliance requirements under such conditions, the Union Finance Minister had announced several relief measures relating to statutory and regulatory compliance matters across sectors in view of COVID-19.
To give effect to the earlier announcements made by the Finance Minister, on 24.03.2020, regarding several relief measures relating to statutory and regulatory compliance matters across sectors in view of COVID-19 outbreak, the govt has brought in an Ordinance on 31.03.2020 which provides for extension of various time limits under the Taxation laws, and related compliance matters.
The revised dates for filing of returns, revised returns for FY 18-19 have been prescribed under the ordinance. The dates for investments, and payments towards investments for the year ending March 2020, to claim deduction under various sections of income tax act has also been prescribed.
The revised timelines allows a breather for salaried professionals, small businesses, and others to plan better considering the restrictions imposed due to the current lockdown.
Some of the important matters and time limits and extensions as per this Ordinance are as under:
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- Extension of last date of filing of original as well as revised income-tax returns for the FY 2018-19 (AY 2019-20) to 30th June, 2020.
- Extension of Aadhaar-PAN linking date to 30th June, 2020.
- The date for making various investment/payment for claiming deduction under Chapter-VIA-B of IT Act which includes Section 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (Donations), etc. has been extended to 30th June, 2020. Hence the investment/payment can be made up to 30.06.2020 for claiming the deduction under these sections for FY 2019-20.
- The date for making investment/construction/purchase for claiming roll over benefit/deduction in respect of capital gains under sections 54 to 54GB of the IT Act has also been extended to 30th June 2020. Therefore, the investment/ construction/ purchase made up to 30.06.2020 shall be eligible for claiming deduction from capital gains arising during FY 2019-20.
- The date for commencement of operation for the SEZ units for claiming deduction under deduction 10AA of the IT Act has also extended to 30.06.2020 for the units which received necessary approval by 31.03.2020.
- It has provided that reduced rate of interest of 9% shall be charged for non-payment of Income-tax (e.g. advance tax, TDS, TCS) Equalization Levy, Securities Transaction Tax (STT), Commodities Transaction Tax (CTT) which are due for payment from 20.03.2020 to 29.06.2020 if they are paid by 30.06.2020. Further, no penalty/ prosecution shall be initiated for these non-payments.
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Recently the government had set up a special fund “Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)” to generate support from citizens towards providing relief to the persons affected from the outbreak of Corona virus. The Ordinance has amended the provisions of the Income-tax Act to provide the same tax treatment to PM CARES Fund as available to Prime Minister National Relief Fund. Therefore, the donation made to the PM CARES Fund shall be eligible for 100% deduction under section 80G of the IT Act. Further, the limit on deduction of 10% of gross income shall also not be applicable for donation made to PM CARES Fund. As the date for claiming deduction u/s 80G under IT Act has been extended up to 30.06.2020, the donation made up to 30.06.2020 shall also be eligible for deduction from income of FY 2019-20.
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