Social Media is one of the fastest media for spread the news – True or Fake.
The news of change of Financial Year from 31st March to 30th June got viral.
All the More important, the news was well backed by the Notification. The said Notification was actually issued for notifying the date of apllicability of stamp duty on securities transactions under the Indian Stamp Act. Someone wrongly presumed it as change of the financial year.
Since, the issue was of higher repurcussion, everyone checked it instantly and immediately, within next 5 minutes, suitable clarification got circulated that
“Financial Year is not Extended. The Notification is regarding an amendment related to India stamp Act which been made applicable from 1st july
Notification is correct but it is not in the context of FY extension.”
However , since the issue is of wider interest , it got an immediate clarification.
For general issue , our sincere advice is not to rely on Whatsapp University. Do consult your CA, Advocate, Tax Practitioner or Accountant. You can read the genuine contents at our website on www.TheTaxTalk.com
Here is a fact finding of the actual date extension for FY 2019-20. The contents is taken from the article of CA Naresh Jakhotia which was published in the last week at our portal. Other Readers can also share their articles or write up by submitting it on our portal at www.TheTaxTalk.com
in “Submit Article” section for the mass benefit of all: .
FACT FINDING :
1) FY 2019-20 is not at all extended till 30th June, only the date is extended for some compliance.
Fact: Financial year closure is not extended. Only the date of compliance which were required by 31.03.2020 either by the taxpayers or by the tax authorities has been deferred till 30.06.2020.
2) Belated returns or Revised returns for the FY 2018-19 can be filed till 30th June.
Fact: All taxpayers who have not filed the return of income of FY 2018-19 can file or revise the return till 30th June 2020. In normal course, belated income tax return cannot be filed after the end of the relevant assessment year. However, due to lock down till 14th April, Government is allowing the filing of return of FY 2018-19 (AY 2020-21) till 30.06.2020. Readers may noted that earlier there was a period of 2 years for filing or revising the return which is reduced to 1 years earlier.
3) In the FY 2019-20, income is taxable till 31st March only and not upto 30th June, i.e. for taxability of income financial year is considered till 31st March only.
Fact: The income of the FY 2019-20 (i.e., till 31st March 2020) will be taxable for the FY 2019-20.
4) Deductions under 80C, 80D, etc. can be claimed by investing till 30th June.
Fact: Investment in PPF/LIC etc which are eligible for deduction u/s 80C and mediclaim payment for claiming deduction u/s 80D can be done till 30.06.2020.
5) New LIC, mediclaim, PPF, NPS, etc. policies taken till 30th June will be eligible for the deduction for the FY 2019-20.
Fact: There is a restriction of Rs. 1.50 Lakh for deposits in the PPF A/c in one year. If the person has not deposited any amount in the PPF Account till 31.03.2020 and if he deposits it in between April to June 2020 then surely he will be eligible for deduction u/s 80C in the FY 2018-19. However, as per the present PPF rule, such person may not be able to invest again Rs. 1.50 Lakh for the FY 2020-21 as there is an yearly ceiling of Rs. 1.50 for deposit in the PPF Account. To take care of this situation, the Government need to amend the PPF rules to provide that Rs. 3 Lakh in aggregate can be invested for the FY 2019-20 & 2020-21.
6) Payment of Premium of old policies of LIC, mediclaim, PPF, NPS, etc. due upto 31st March can be claimed as deduction even if paid till 30th June.
Fact: If the person pays the premium which is due in April – 2020 and if he makes the payment of the same before 30.06.2020 then he can get deduction in the FY 2019-20 (AY 2020-21). Only the payment of such policies which has become due before 31.03.2020 would be considered for deduction.
7) Housing loan interest is eligible for deduction on accrual basis, so interest accrued till 31st March will be eligible for the deduction in FY 2019-20. However Installments due upto 31st March can be claimed as deduction even if paid till 30th June.
Fact: If a person deposits the amount in April to June 2020 in his housing loan account then he would be eligible for deduction u/s 80C subject to the condition that the amount is due till March – 2020. It may be noted that interest on housing loan is eligible for deduction on accrual basis and not on payment basis. All interest which is due till 31.03.2020 even if not paid(even till 30.06.2020) is eligible for claiming in AY 2020-21 itself.