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.
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| 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
I am a Chartered Accountant by profession. I specialise in personal taxes and corporate income tax matters. I am an avid reader and track developments in financial markets, economy and other market developments.
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