Make Use Of The Lockdown To Finish Pending Tax Filings

The government has extended tax-related deadlines between 20 March and 29 June till 30 June. Here are the points to note so that you finish the paper works in this lockdown instead of piling it up for later.

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New Delhi: Even as the finance minister Nirmala Sitharaman extended tax- related deadlines from 31 March to 30 June, it’s always a prudent to finish your tax related filings in the 21-day lockdown while waiting for normalcy to return. The government has extended tax-related deadlines between 20 March and 29 June till 30 June. Here are the points to note and finish your paper works in this lockdown instead of piling it up for later. Income tax returns: Typically, you are supposed to file ITR returns for the financial year by 31 July of the relevant assessment year (AY) but if you have been unable to do so, there is a chance to file a belated return till 31 March of the same AY. The deadline for belated returns for FY19 or AY20 is ideally 31 March but extended till 30 June. You should be aware that filing ITR later than the original date calls for penalty. For instance, if you file after the original date (31 July) till 31 December, you will have to pay a flat penalty of Rs 5,000, whereas filing between 1 January and 31 March attracts a late fee of Rs 10,000.  If your income is below Rs 5 lakh, you will be charged a flat Rs 1,000 for all timelines till 31 March, and in this case till 30 June. Filing revised returns: This particular facility is for those who make a mistake in filing returns. The mistakes can be filling incorrect information or failing to report certain income or claim deductions. Those who are looking to revise their returns for FY19 have now time till 30 June. Availing deductions: Although financial planners suggest planning the tax-saving investments in advance, there are still lot of people who keep delaying the task. In case you have been unable to invest in tax saving instruments under Section 80 C, you have enough time to do those investments till 30 June to claim deduction benefit for FY 20. Capital gains reinvestment: Similarly, there is an extension in the time limit for roll-over investment or reinvestment of long-term capital gains (LTCG), if you have made any. Consider the example, in the case of LTCG from the transfer of capital assets such as real estate and gold, you can avail tax exemption if it is reinvested in capital gains bonds specified under Section 54EC of the Income-tax Act. But make sure it is reinvested within six months of the asset’s transfer. It means that by making investments in any tax-saving instrument between 1 April and 30 June, you can easily claim a deduction for either FY19 or FY 20. Self-assessment tax: It is basically the payment of any penalty on pending tax dues at the time of filing belated returns. The interest rate is charged on the dues for each month of delay in payment. Normally, taxpayers settle these taxes at the time of filing their final ITR. The FM has relaxed the rate of interest on due taxes from 12 per cent earlier to 9 per cent annum until you file the returns. On advance tax: According to Section 208 of the Income-tax Act, every individual assessee whose estimated tax liability for an FY exceeds ₹10,000 needs to pay advance tax. Typically, a salaried individual need not worry about paying advance tax as employers deduct it on their behalf. But professionals and freelancers have to estimate their incomes and pay advance tax accordingly. Pan-Aadhaar linking:  Even the deadline to link PAN with Aadhaar has been extended till June 30, 2020. The earlier deadline was March 31, 2020. Hence, those who were still not able to link their PAN with Aadhaar, this extension will provide ample time and avoid their PAN becoming 'inoperative', as per current income tax laws. Vivad Se Vishwas: In Budget 2020, a direct tax scheme was announced for settling the tax dispute between individuals and tax department. The scheme offers a complete waiver on interest and penalty to the taxpayers with a full and final settlement of the dispute. With regards to the deadline, if it was not extended, then individuals opting to settle their tax dispute after March 31, 2020, would have to pay an extra 10 per cent of the disputed tax amount. The extension offers relief to taxpayers who could not visit their chartered accountants to figure out whether they should opt for the scheme or not. Further, to that law came into effect from March 17, 2020 and related forms and other rules of the scheme were notified on March 18, 2020.