ITR Filing: 6 financial tasks to complete before March 31, 2020

Income Tax (30th Amendment) Rules, 2021 - CBDT

From linking PAN with Aadhaar to booking LTCG up to Rs 1 lakh on equity investments, there are some financial tasks you should complete within this deadline.

From linking PAN with Aadhaar to booking LTCG up to Rs 1 lakh on equity investments, there are some financial tasks you should complete within this deadline. March 31, 2020, is the deadline for several important financial tasks. Once you miss the date, you might not get another chance to complete the same tasks. As only a few weeks are left for the end of the current financial year, let’s look at these crucial financial tasks you can’t delay.

1. Link PAN and Aadhaar

The government has on a number of prior occasions extended the last date to link Aadhaar with PAN. The final deadline is now March 31, 2020. If you fail to link your PAN and Aadhaar, the Income Tax Department can penalise you up to Rs 10,000 for it. For example, your PAN might be deemed inoperative and you might be fined Rs 10,000 if you transact using your bank account linked to your PAN, but not with your Aadhaar after this deadline. In fact, you may be penalised each time you violate the rule. So it’s advisable to link your PAN and Aadhaar immediately. Linking PAN and Aadhaar is mandatory if you wish to file your tax returns, and also for important financial steps like opening a bank account, buying and selling property, applying for a loan or a credit card, making investments, etc.

2. File tax returns for AY 2019-20

Late income tax return (ITR) filing attracts penalties. The deadline for filing the tax returns for FY 2018-19 (AY 2019-20) was July 31, 2019, later extended by a month. The next deadline to file your returns belatedly was December 31, 2019. The final deadline to do it is March 31, 2020. However, penalties apply. If your income is below Rs 5 lakh, the late filing fee on belated returns is up to Rs 1000, whereas if your income is above Rs 5 lakh, this penalty could be up to Rs 10,000 for filing by March 31. This is also the last date to file revised returns in case there is any discrepancy in your ITR. Entering the next financial year with lapses in ITR can be problematic. You’ll be well-advised to file your late or revised returns within the deadline.

3. Make tax-saving investments in FY 2019-20

If you’re yet to exhaust available tax-deduction benefits through eligible investments and insurance purchases to lower your tax burden in FY 2019-20, you must do so before March 31, 2020. Taxpayers often do not take stock of their existing tax-saving measures and hence fail to accurately assess their tax-saving needs. Under Section 80C of the Income Tax Act, for example, a taxpayer can get deduction benefit up to Rs 1.5 lakh. So, if you fall in the highest tax bracket and your existing tax-saving measures are less than this limit, you can invest more in order to maximise the benefit. You can also invest in the National Pension Scheme (NPS) and claim further tax deductions up to Rs 50,000 under Section 80CCD. Additionally, you can claim a deduction of up to Rs 25,000 for medical insurance purchased for self, spouse and dependent children and up to Rs 50,000 for senior citizen parents under Section 80D and claim the interest component of your education loan repayment as a tax deduction under Section 80E. Not just that, you can maximise tax saving by utilising various tax allowances you’re eligible for.

However, do note that your last-minute tax-saving investments and insurance purchases should ideally be in line with your financial goals, insurance requirements, risk appetite, and liquidity demands.

4. Avail PMAY interest subsidy on a home loan

Under the government’s Pradhan Mantri Aawas Yojana-Urban scheme, eligible first-time homebuyers can get an upfront credit-linked interest subsidy while availing a home loan for an affordable home. This scheme is implemented in four income categories: Economically Weaker Sections (EWS), Low Income Group (LIG), Middle Income Group-I (MIG I) and Middle Income Group-II (MIG II). While homebuyers falling under the EWS and LIG categories can avail this benefit until March 31, 2022, those falling under the MIG I and MIG II categories can do so only until March 31, 2020.

First-time homebuyers under the MIG I and MIG 2 categories can avail interest subsidy up to Rs 235000 and Rs 230000, respectively, if they meet all the scheme’s eligibility requirements pertaining to their annual household income, home loan amount, property carpet area, etc. So, if you’re planning to buy your first home through a home loan and meet these requirements, you should try to finalise your loan before March 31, 2020, to save on your interest payment.

5. Investment benefit under PMVVY

March 31, 2020, is also the deadline to avail the investment benefit under the Pradhan Mantri Vaya Vandana Yojana (PMVVY) pension scheme. So, if you’re planning to invest in it, hurry up.

6. Booking LTCG up to Rs 1 lakh

Lastly, if you want to book long-term capital gains (LTCG) on your equity investments in the coming months and your LTCG amount exceeds Rs 1 lakh, you may want to book a profit up to Rs 1 lakh before March 31, 2020, and the remaining in the next financial year. This would help in avoiding the 10% tax that’s levied on LTCG exceeding Rs 1 lakh in a financial year.

Source: financialexpress