What’s the most unexpected thing that has happened to the world in the past few days? Hint, hint — it has brought the world to a complete standstill like nothing ever has.
COVID-19 hit the world like a huge hurricane. The devastation is unprecedented and so is the fear and anxiety. When it hit China, it was viewed as a localised epidemic. Only after it started spreading across the globe that people started taking it seriously.
India is in a state of complete lockdown for 21 days presently. Half the countries in the world, including first world nations like the U.S.A, France, Germany, are under complete lockdown as well. After learning from Italy’s mistake, the whole world took the COVID-19 induced lockdowns seriously. The WHO declared pandemic, has not only caused a health havoc but also given investors a tough time in the market. Following the huge loss in money triggered by COVID-19, PM Narendra Modi has decided to help people in times of this global and economic crisis.
Social distancing is the unequivocally accepted resolution to control the pandemic. In light of the lockdown, the government has decided to provide a few relief measures with regards to the time compliance and other issues being faced by the taxpayers. As per the press note released on 31st March 2020, these are most important extensions and features of the ordinance issued:
Table of Content
1. Income Tax Return date
Income Tax Returns, original and revised for the Financial Year 2018-19 (Assessment Year 2019-20) can be filed till 30th June 2020.
ITR or Income tax return is basically a form in which a taxpayer is supposed to declare his income, expenses, investments, tax deductions, taxes he has paid etc. Click here to know more about filing an Income Tax Return.
2. Saving Income Tax date
There are various tax saving instruments available in the market like ELSS, ULIP, Tax-saving FDs, etc. The government of India announced that the date for investing or paying in all tax-saving instruments have been extended to 30th June 2020. Earlier the date was 31st March 2020.
These included deductions under Section 80C which include LIC, PPF, NSC, deductions under Section 80D which include mediclaim and those under Section 80G which include donations and contributions made to certain government approved funds.
The Supreme Court (SC) announced that quoting your Aadhar number will be compulsory when filing your Income Tax Returns (ITR). The date of linking PAN to Aadhar has been extended to 30th June 2020.
It is to be noted that if you don’t get your PAN linked to your Aadhar, then your PAN will become inoperative. This means that you will not be able to use your PAN to conduct financial transactions wherever using PAN is mandatory. These financial transactions include investing in a fixed deposit, opening a bank account, etc. It will be further taken into account that this person doesn’t own a PAN card.
4. Capital Gain deductions
Capital gains are those that are made by selling any kind of capital asset. It excludes properties inherited by will as there is no sell or gain, just passing from one to another. A few examples of capital assets are land, house property, vehicles, patents, trademarks, leasehold rights, machinery, and jewellery.
The date for making investment/purchases for deduction under Sections 54 to 54GB of the Income Tax Act has been extended to 30th June 2020 for claiming deduction from capital gains arising during FY 2019-20.
5. Rate of Interest
Finally, one of the most significant relief measures taken by the government is cutting down of the rate of interest charged. A reduced rate of interest of 9% will be charged for non-payment of Income Tax, TCS, TDS, Commodity transaction tax (CTT), equalization levy and Securities Transaction Tax (STT) if they are due for payment between 20th March 2020 to 30th June 2020.
No penalty/prosecution will be charged in case of non-payments either.
This concludes the list of the most important relief measures taken by the government to fight COVID-19. Coming down to what you can do on your end to ensure your financial health – here’s a list of things you can do to ensure you have a healthy portfolio. In the end, we urge you to wash and sanitize your hands and surroundings. Take care of your family, stay safe, stay home, for this too shall pass.