Normally, a taxpayer will get time till the tip of a monetary yr to make the tax-saving investments or deposits, which is thirty first March 2020, for FY 2019-20. However as a result of unfold of COVID-19, the federal government needed to implement lockdown throughout the nation. So, to offer reduction to taxpayers by way of timeline, the federal government had prolonged the due dates expiring between twentieth March and thirtieth July 2020 to thirty first July 2020. Therefore the due date to make the tax-saving investments additionally obtained prolonged until thirty first July 2020.
CBDT had up to date all of the ITR kinds to include the investments made on this prolonged interval in a brand new Schedule DI (Particulars of Funding) individually. Therefore all of the investments made out of 1st April to thirty first July to assert tax deductions for FY 2019-20 are to be talked about on this schedule DI for a transparent differentiation.
The declare for deductions and exemptions underneath Schedule DI will pertain to the investments a taxpayer desires to make for FY 2019-20. That means solely timelines of the deduction was prolonged, however the combination deduction can’t exceed the yearly restrict relevant to the FY 2019-20. For instance, (i) deduction allowed underneath part 80C continues to be capped at Rs 1.5 lakh for tax saving funding made out of 1st April 2019 to thirty first July 2020. (ii) capital exemption funding allowed in bonds underneath part 54EC together with an prolonged interval of Rs 50 lakh solely.
Tax saving deductions which are allowed to be claimed for an prolonged interval in Schedule DI are chapter VI A deductions. These embody LIC premium, Public Provident Fund, principal fee of housing mortgage, funding in equity-linked saving scheme and so on. underneath part 80C, fee in direction of LIC annuity plan underneath part 80CCC, deposit in pension account underneath part 80CCD. Additional, a deduction for funds comparable to medical insurance coverage and bills underneath part 80D, 80DD and 80DDB & deductions allowed for funds in direction of Curiosity on housing and different eligible loans underneath part 80E, 80EE, 80EEA and 80EEB. Donations made to the acknowledged organizations underneath part 80G, 80GG, 80GGA and 80GGC are additionally lined for claiming an exemption for the prolonged date.
Time restrict for tax saving exemptions for investing the capital acquire proceeds in one other eligible asset was additionally prolonged until thirtieth September 2020.
These rollover investments made throughout 1st April 2020 to thirtieth September 2020 for claiming long run and brief time period capital acquire exemption are additionally to be talked about in Schedule DI. Capital acquire exemptions allowed underneath part 54 for buy of residential property in opposition to a sale of residential property, switch of agricultural land in opposition to the acquisition of one other agriculture land underneath part 54B, buy of residential property in opposition to the switch of long run capital asset apart from residential property underneath part 54F and buy of specified bonds in opposition to the sale of land or constructing underneath part 54EC are eligible for prolonged interval exemptions.
Normally, in case of capital positive aspects, a taxpayer will get a particular time to speculate to be eligible for claiming the exemption. Therefore for all of the capital acquire transactions, the place the time allowed to make an funding or assemble or buy a home could also be expiring throughout twentieth March 2020 to twenty ninth September 2020, the federal government prolonged the identical to thirtieth September 2020 for claiming capital acquire exemption. For instance, part 54 permits a capital acquire exemption for the sale of long run capital belongings like land or constructing by investing in specified bonds of REC, NHAI and so on. inside 6 months of the date of switch. Therefore if a taxpayer makes a sale of land say for instance, on thirtieth October 2019, the final date for investing in bonds is thirty first April 2020. Nevertheless, with this extension, the taxpayer might nonetheless avail exemption if the bonds are bought until thirtieth September 2020.
All these prolonged deductions and exemptions must be reported individually by taxpayers in Schedule DI offered within the ITR. A unique tab is out there with title DI within the ITR type. The screenshot of the Schedule DI is captured beneath for reference.
(The writer is Founder and CEO, ClearTax)