While the economic package announced by the Centre missed the expectations of many, it did save the taxpayers and investors a lot of trouble. This is thanks to a simple extension of many deadlines and a waiver (reduction in certain cases) of penalties for non-compliance.

Rightly so, since adhering to the earlier deadlines was rather difficult, given the restrictions on movement during the lockdowns.

In many cases, the due dates were pushed to June 30, 2020. But this deadline is about to end in another three weeks. Here are the things you need to do before the deadline passes.

Tax matters

Pay advance tax: Taxes (including TDS and advance tax instalments) for which the last date of payment falls within the period March 20 – June 29, 2020 can now be paid until June 30, 2020, with a reduced penalty.

During this window, the interest on delayed payment levied under the Income Tax Act under sections 234 B and 234 C shall be 0.75 per cent per month (under each section), instead of 1 per cent per month earlier.

For instance, the reduced rate of 0.75 per cent per month shall apply in case of delay in payment of the first instalment of advance tax for assessment year 2020-21, which was due on June 15. For delays beyond June 30, 2020, interest shall be levied at 1 per cent per month.

File your return: If you have missed the due date for filing your tax return for the assessment year 2019-20 (FY2018-19), or wish to make any corrections or alterations, you can now file either the original (belated) return or the revised return by June 30, 2020. This is thanks to the extension in due date, provided by the Centre.

Linking Aadhar with PAN: If you have not yet linked your Aadhar card with PAN, you can do so till June 30, 2020. Failure to do so could make your PAN invalid. Apart from your dealings with the taxman, invalidation of PAN may cause hardships in several other transactions such as opening of bank accounts, deposit of cash in bank account, opening of demat account, transaction of immovable properties, dealing in securities, and purchase of car, among others.

Submitting forms 15G and 15H: At the beginning of every financial year, those of you whose income falls below the basic exemption limit, can file a form 15G (or 15H if you are a senior citizen), with banks or financial institutions. These forms serve as a self-declaration that your income falls below the basic exemption limit for that financial year, and hence, TDS is not required to be deducted on the interest income earned. This saves you the trouble of applying for a refund later.

The Centre had extended the validity of forms 15G and 15H submitted for 2019-20 to June 30, 2020. For the assessment year 2020-21, you will now be required to file such forms by June 30, to avoid any tax deductions.

Tax-saving investments: The Centre had also extended the due date for making tax-saving investments and expenses (under Chapter VI A – Part B of the IT Act), to June 30, 2020, for the assessment year 2020-21 (FY2019-20).

These tax-saving investments could be in units of equity-linked savings schemes (ELSS), unit-linked insurance plans (ULIP), National Savings Certificates (NSC), fixed deposits with a five-year term, National Pension Scheme (NPS), Public Provident Fund (PPF), Sukanya Samriddhi Yojana, and home loan principal repayment, among others.

The expenses include premiums paid for medical insurance and life insurance, and interest on loan taken for higher education. The said extension also applies for donations eligible for deduction under Section 80G (including to the PM Cares Fund).

Also, investments in property or in notified bonds of NHAI, PFC, IRFC or REC can reduce your tax on certain long-term capital gains, by virtue of sections 54 to 54GB of the Income Tax Act. Even these can be made by June 30, 2020, to get deductions pertaining to assessment year 2020-21 (FY2019-20).

Other investments

Small savings schemes: The subscribers of PPF and Sukanya Samridhi Yojana are required to deposit a minimum of ₹500 and ₹250 respectively, in any financial year by March 31 of that year. For FY20, you can pay the same before June 30 and avoid payment of default fee.

Similarly, for recurring deposit under Post Office schemes, an agreed sum of money has to be paid every month (minimum of ₹100) to avoid penalty. With an extension in deadline for the months of April and May 2020, you can make such investments before June 30.

SCSS: Investors aged between 55 and 60 years can invest in the Senior Citizen Savings Scheme (SCSS), if they deposit their retirement benefits within one month of receipt. Such people who retired between February and April 2020 can now make investments before June 30, 2020 in the SCSS, thanks to relaxation provided by the Centre in this regard.

Take note

- Make tax-saving investments for FY2019-20

- Pay first instalment of advance tax for FY2020-21

- File revised or belated returns for FY2018-19

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