Two person have invested Rs. 1 Lakh on 15th April 2020, whether it can be treated as investment in different financial years for tax deduction u/s 80C?

0
872
80C-

Two person have invested Rs. 1 Lakh on 15th April 2020, whether it can be treated as investment in different financial years for tax deduction u/s 80C?

Query]

Dear CA Naresh Jakhotia,

 Unable to Register in The Tax Talk portal and Post the following query since yesterday due to delay in moderation! Would you please care to extend following clarification at your earliest convenience?

 Read your informative article on “Date Extension of 31st March to 30th June 2020: Confusions & Clarification: by CA Naresh Jakhotia”.

 There is confusion among taxpayers, as to how, or whether, they can make investments in instruments like Public Provident Fund (PPF), NPS, National Savings Certificates (NSC), five-year Fixed Deposit to save tax even after March 31 to save tax for FY 2019-20. It is not clear if cut off investment date for all the tax-saving investments u/s 80C has been increased or not. Similarly, confusion is there regarding extension in date for voluntary contribution in Tier-1 Account of National Pension System (NPS) u/s 80CCD(1B), payment of health insurance premium u/s 80D as well as on making donations u/s 80G.

 To cite a specific example for desired clarity:

Mr X is yet to make his tax-saving investments for FY 2019-20, while Mr Y has completed his investments for the financial year. If both of them invest Rs 1 lakh each after the lockdown gets over, say on April 15, 2020. 

In that case, will the investments made on same day be treated differently for Mr X and Mr. Y? For Mr X, the investment made on April 15 , 2020 be treated as investment for FY 2019-20 and for Mr. Y, the investment made on same day be treated as investment for FY 2020-21?

 Appreciate receiving the desired clarification from this professional forum at the earliest.

[Anandi Poddar – anandi.poddar@yahoo.com]

 Opinion:

Thanks for your query.

  1. The investment done in between 1st April 2020 to 30th June 2020 can be treated as investment for the purpose of deduction for FY 2019-20.
  2.  It means that the person can make investments in instruments like Public Provident Fund (PPF), NPS, National Savings Certificates (NSC), five-year Fixed Deposit to save tax for FY 2019-20 even after March 31
  3. The cut-off date for investment of all the tax-saving investments
    a)  u/s 80C
    b) for voluntary contribution in Tier-1 Account of National Pension System (NPS) u/s 80CCD(1B)
    c) payment of health insurance premium u/s 80D
    d)For making donations u/s 80G.
    has been very clearly extended
  4. In your case, if Mr X is yet to make his tax-saving investments for FY 2019-20, while Mr Y has completed his investments for the financial year and if both of them invest Rs 1 lakh each after the lockdown gets over, say on April 15, 2020 then
    a) Even if the investments is made on same day, it will be treated differently for Mr X and Mr. Y
    b) For Mr X, the investment made on April 15 , 2020 be treated as investment for FY 2019-20 and
    c) for Mr. Y, the investment made on same day be treated as investment for FY 2020-21.

[Readers can post the query / suggestion below this column in comment section]

************************************************************************

For Tax & Corporate Law Updates on Mobile, we have created Telegram and Whatsapp Group with following Link:

  1. Telegram Group at –

https://t.me/TaxTalkk

  1. Whatsapp Group at
    1. https://chat.whatsapp.com/D21tBXYf26r4yluW6U9u4J

 

 

  1. https://chat.whatsapp.com/Hnb4oYc9tAI5IkY3hQYgld

 

 

3.https://chat.whatsapp.com/EDNNOL2vkHkE8QexNE4fxm

 

 

  1. https://chat.whatsapp.com/DGMpkM1ct70ASrrhnGP4mA

Income Tax Act on Your Mobile Now
Android Application
for
Income Tax Act – 1961 with Cost Inflation Index
and other tools on Mobile now at following link:

https://play.google.com/store/apps/details?id=com.thetaxtalk&hl

LEAVE A REPLY

Please enter your comment!
Please enter your name here