Giving respite to tax payers, various statutory deadlines related to income tax which were ending on 31 March, have now been extended till 30 June. Considering the hardship people are facing due to coronavirus (COVID-19) and measures taken to curb it, finance minister Nirmala Sitharaman announced the extension of the deadlines. Most experts welcome the relief measures announced by finance minister. “I would compliment the FM on coming up with well thought out comprehensive measures across various laws. There was huge pressure on the government to extend various deadlines. Every important issue seems to have been covered. Reduction of interest is a great boon since penal interest is killer in most cases," said Ameet Patel, partner, Manohar Chowdhry & Associates, a chartered accounting firm.
Under the income tax laws, the due date to file income tax return (ITR) for a financial year (FY), ends typically on 31 July of the relevant assessment year (AY). However, if someone fails to file her ITR before the due date, she can still file a belated return till 31 March of the same AY. So if you have not yet filed return for FY19, you can file a belated return till 31 March 2020. This deadline has now been extended till 30 June, so now you can file your return for FY19 till 30 June. However, you will have to pay a late fee at the time of filing returns.
A return filed after due date (31 July) till 31 December of the AY attracts a penalty of ₹5,000 ( ₹1,000 if income is below ₹5 lakh), whereas a belated return filed between 1 January and 31 March of the AY attracts a late fee of ₹10,000. While earlier late fee was not mandatory, after the introduction of Section 274F in Finance Act, 2017, you can’t escape paying it. So, if you file your return for FY 19 now or before 30 June 2020, you will have to pay a penalty of ₹10,000.
Besides penalty, you are also supposed to pay interest on due taxes each month until you file returns. However, while earlier you were supposed to pay an annual interest rate of 12% on due taxes, now you will have to pay an interest at the rate of 9% per annum till you file the return.
Investment for tax savings
Those who are still waiting to make investments in various instruments like Equity liked savings scheme (ELSS), Public Provident Fund (PPF), National Savings Certificate (NSC), which offer tax deductions under section 80 C, can do their investments till 30 June and continue to claim deduction for FY 2019-20.
Aadhaar-pan linking deadline which was also ending on upcoming 31 March, has been extended to June 30. Remember, that if you don’t link your permanent account number (PAN) before the due date, your PAN will be considered as inoperative and then the income tax department might impose a penalty of Rs10,000 on you for if the find you using an inoperative PAN.