Tax-savings investments made in FY 2019-20 extended till 30 June 2020

Taxpayers who have not been able to complete their tax-saving investments for FY 2019-20 by 31 March 2020 are given an extended time until 30 June 2020. Such taxpayers can claim a deduction in the tax filing of FY 2019-20. The investments qualifying for tax deduction include deposits in mutual fund ELSS, PPF, NSC, LIC premium, SSY, NPS subscription, health insurance payments, donations and so on.

For example:

FY 2019-20 Tax saving investments Amount (Rs)
1 April 2019 to 31 March 2020 120,000.00
1 April 2020 to 30 June 2020 60,000.00
Total investment under section 80C 180,000.00
Deduction claimed for FY 2019-20 150,000.00
Deduction not claimed 30,000.00

Such taxpayers will not be able to claim a double deduction both for FY 2019-20 and FY 2020-21 for investments made between 1 April 2020 and 30 June 2020. As seen in the example above, out of the investment of Rs 60,000 made between 1 April and 30 June, only the unclaimed portion of Rs 30,000 is claimable in FY 2020-21.

Also Read: PM CARES Fund Donation to Qualify as CSR Spending

FY 2020-21 Tax saving investments Amount (Rs)
1 April 2020 to 30 June 2020 unclaimed 30,000.00
1 July 2020 to 31 March 2021 100,000.00
Total investment under section 80C 130,000.00
Deduction claimed for FY 2020-21 130,000.00

Also, on a case where taxpayers have already completed their investments for FY 2019-20 by March 31 can wholly claim the investments made after 1 April in FY 2020-21.

Above example is only for section 80C which carries an upper limit of Rs 1,50,000. Taxpayers can similarly claim a deduction for health insurance under section 80D, donations under section 80G, and so on. 

In case you wish to claim the tax deduction for FY 2019-20, you should claim while filing the income tax return for FY 2019-20. Your employer will not accept the claims for FY 2019-20 after 1 April 2020. Hence, you need to calculate and claim a deduction for FY 2019-20.

For any clarifications/feedback on the topic, please contact the writer at sweta.dugar@cleartax.in

You May Also Like

Taxation of dividend income received on or after 1 April 2020 (FY 2020-21)

You may receive a dividend from your equity or mutual fund investments.…

Know the taxation rules for income F&O trading

Futures and options are stock derivatives that are traded in the stock…

What is the TDS provision for rent paid by individuals above Rs 50,000?

Many people are unaware of TDS provisions while paying rent on the…

Important Cash Transaction Limits and Penalties Under Income Tax That You Need to Know About

In India, there are a lot of transactions that go unaccounted for,…