The government has extended the deadline to complete tax-savings to June 30, 2020, via an ordinance dated March 31, 2020. However, this might lead to individuals filing ITR to claim excess tax deducted from their salary income.
The government has extended various tax-related deadlines for the financial year 2019-20 to June 30, 2020 (from March 31, 2020). These include the deadline for completing one's tax-saving exercise.
According to a finance ministry press release issued on March 31, "The date for making various investment/payment for claiming deduction under Chapter-VIA-B of Income-tax Act, 1961 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."
However, one must remember that extension of tax-saving deadline to June 30, 2020 does not mean that government has extended the financial year. The financial year 2019-20 ended on March 31, 2020, and a new financial year has started from April 1, 2020, onwards.
According to chartered accountants and tax experts, individuals making tax-saving investments in the months of April, May and June, 2020 are unlikely to be able to claim deduction from their salary income to reduce TDS. This is because full tax due on this income would most likely have already been deducted via TDS by the employer in March 2020 itself. This would result in the TDS by employer being higher than what it should have been had the deduction been taken into account before the TDS.
Once the tax saving investment is made in the month of April, May, June, 2020 then the deduction for the same can be claimed while filing one's income tax return.
Remember excess tax deduction from salary income can be adjusted against tax payable on a person's other taxable incomes. Interest received from fixed deposits, recurring deposits etc. are some examples of other income which is taxable in the hands of an individual.
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