Hurry up! From making tax-saving investments to paying advance tax, complete these tax tasks today : 31-07-2020

If you are yet to make investments for the Financial Year 2019-20 to claim tax deduction under chapter VI-A of the Income-Tax Act or have to complete some tax tasks as specified by the government, then you need to hurry up as today is the last day to do so. It may be noted that in a bid to give some relief to taxpayers during the lockdown, the government had made some changes in the income tax compliance requirements and extended various deadlines, some of which were extended till July 31, 2020.

So, if you don’t want to miss out on this opportunity, then you need to act today, and fast, unless some deadlines are extended again. Here’s what you need to do:

1. Deductions under Chapter VI-A

(a) Section 80C

As the due date for making investments or deposits in order to claim deduction under chapter VI-A of the Income-Tax Act has been extended till 31.07.2020, an assessee can make various investments or deposits such as life insurance policies, PPF, Sukanya Samriddhi Scheme, repayment of housing loan, etc, in a bid to save tax.

(b) Deduction under Section 80D

An individual or HUF (resident or non-resident) can claim deduction for amount paid towards the health insurance policy, preventive health check-up or medical expenditure. Deduction for medical expenditure is available only if two conditions are satisfied – first, the person for whom the expenditure is incurred is a senior citizen, and second, no medical insurance policy has been taken for such person.

Further, “deduction shall be admissible only if payment is made by any mode other than cash. However, payment in cash for the preventive health check-up is allowed. Where an individual makes payment for the health insurance policy, medical expenditure, etc. up to 31.07.2020, the deduction can be claimed from the taxable income of the financial year 2019-20,” says Naveen Wadhwa, DGM, Taxmann.

(c) National Pension System

An individual is eligible to claim deduction for the amount contributed to the National Pension System or Atal Pension Yojana. Deduction can be claimed up to Rs 200,000 (including additional deduction of Rs 50,000) for the contribution made by the subscriber. Contribution made by the employer to the NPS account of the employee is also deductible to the extent of 14% or 10% of the salary, as the case may be.

“Various deductions under Chapter VI-A are allowed on payment basis notwithstanding the period to which the corresponding investment or expenditure belongs to. Example, if the medical insurance policy is related to financial year 2020-21, the payment of medical insurance premium can be claimed as deduction from the taxable income of financial year 2019-20 provided the payment of premium is paid on or before 31.07.2020 and the details thereof are furnished in Schedule DI,” says Wadhwa.

2. Furnishing of statement of tax deducted at source (TDS)

The person responsible for deduction of tax source has to file a statement of TDS on or before the due date specified in this behalf. These statements are filed in the prescribed formats on quarterly basis except for tax deducted under Section 194-IA, Section 194-IB and section 194M. Due date for furnishing of statement of tax deducted in 4th Quarter of Financial Year 2019-2020 or in the months of February 2020 and March 2020 (for Sections 194-IA, 194-IB and 194M) has been extended till 31.07.2020. Thus, a deductor who has deducted tax during these periods is required to furnish a statement of tax deducted in specified form by 31.07.2020.

3. Furnishing of statement of tax collected at source (TCS)

The person responsible for collection of tax source has to file a statement of TCS on or before the due date specified in this behalf. These statements shall be filed in Form 27EQ on quarterly basis. Due date for furnishing of statement of tax collected during the 4th Quarter of Financial Year 2019-2020 has been extended till 31.07.2020. Thus, a collector who has collected tax during these periods is required to furnish a statement of tax deducted in Form 27EQ by 31.07.2020.

4. Payment of advance tax by senior citizens

The due date for filing of Income Tax Return for the Assessment Year 2020-21 has been extended to 30.11.2020. However, no relief shall be available from the interest chargeable under Section 234A if the tax liability exceeds Rs 1 lakh. Thus, if self-assessment tax liability of a taxpayer exceeds Rs 1 lakh, he would be liable to pay interest under section 234A from the expiry of original due dates, that is, 31.07.2020 or 31.10.2020, as the case may be. The interest under section 234A shall not be levied if the self-assessment tax liability of a taxpayer does not exceed Rs 1 lakh and ITR is filed within the extended due date, that is, 30.11.2020.

“A resident senior citizen who does not have any income from business or profession is not required to pay advance tax and he can pay the entire tax by way of self-assessment tax. For computing the limit of Rs 1 lakh (as specified above), the self-assessment tax paid by a senior citizen on or before 31.07.2020 shall be deemed to be the advance tax. Thus, the same shall be reduced while computing the tax liability of Rs 1 lakh,” informs Wadhwa.

Source : Economic Times