FINANCIAL DEADLINES OF 2020 – MGMA & Associates

It is always good to be well-prepared, especially when it comes to matters of money. To make sure that you have a smooth 2020, money-wise at least, here are eight important financial deadlines you must be aware of.

Credit subsidy under PMAY on home loan: March 31

March 31 is the last date to avail the benefit under Pradhan Mantri Awas Yojana (PMAY) for the middle income group. According to the PMAY scheme details, middle income group I & II (MIG – I&II) can avail the benefit of credit subsidy available on buying a house subject to certain terms and conditions.

Under the scheme, categories are divided basis annual household income. MIG – I household’s income lies between Rs 6 lakh and Rs 12 lakh. This category can avail credit subsidy of four per cent.

Similarly, MIG – II are those whose household income is between Rs 12 lakh and Rs 18 lakh. They can avail credit subsidy of three per cent.

With interest rates on fixed deposits falling, there is another investment avenue a senior citizen can consider -Pradhan Mantri Vaya Vandana Yojana (PMVVY). This is a pension scheme available for senior citizens. The scheme offers a guaranteed payout of pension at a specified rate for 10 years.

Returns are in the range of 8-8.3 per cent depending on mode of investment. This is higher compared to what is offered by fixed deposits. Currently, State Bank of India is offering interest rate of 6.75 per cent for tenure of 10 years to senior citizens.

Under PMVVY, senior citizens can invest up to Rs 15 lakh.

So, senior citizens who want to invest in this scheme have time till March 31, i.e., that is the date till when the scheme is open for subscription.

If you haven’t filed your income tax return (ITR) yet for FY 2018-19, it is important that you do it by March 31, 2020. If you missed this deadline to file belated ITR, then you will not be able to file your ITR unless the income tax department asks you to do the same.

Remember you will be required pay late fee of Rs 10,000 for filing belated ITR. However, if you file it before December 31, then you will be required to pay late filing fees of Rs 5,000.

Similarly, if you wish to revise your ITR in case you made a mistake in your original ITR for FY 2018-19, then the last date to file ITR is March 31, 2020. If the revised ITR is not filed by this date, then you will not be able to file the revised ITR.

If you are living in a rented accommodation and paying rent of more than Rs 50,000 a month, then as per income tax laws, you are required to deduct the tax on the rent paid. As per current income tax laws, a tenant is required to deduct tax on total amount of rent paid at the rate of 5 per cent once in a financial year.

The tax will be deducted either at the time of vacating the house during the financial year or at the end of financial year, i.e., March 31 whichever is earlier

Ensure that the TDS is deposited with the government within 30 days from the end of the month in which deduction is made. Failure to do so will attract penalty and interest.

To save tax you must complete your tax-saving related investments before March 31, 2020. It is important that you have made investments in specified financial instruments under section 80C and/or incurred other expenses to save tax under the Income Tax Act.

If you have not done this by this date, then you will not be able to claim the benefit of tax-saving deductions. Consequently, this will lead to paying higher taxes.

For instance, a tax-saving investment of Rs 1.5 lakh under section 80C, can cut tax out go by Rs 46,800 (cess included) for person paying tax at the rate of 30 per cent.

Therefore, it is important that you have made the required investments before March 31, 2019 to avail the benefits while filing your ITR.

Another thing you should keep in mind related to tax-saving is submission of required documents to your employer to avoid excess TDS deduction. You are required to submit investment proofs, rent agreement etc. to save tax.
However, remember the deadline to submit such documents varies from company to company. Therefore, it is advisable that you check with your HR or finance department to know the deadline to submit these documents and avoid excess TDS deduction from your salary.

The first step in filing ITR is to get TDS certificate from your employer and your bank/s if TDS has been deducted.

Your employer is required to give you Form 16 (TDS Certificate) showing details of your salary paid during the year and tax deducted.

Similarly, bank will issue you Form 16A (TDS certificate) for the tax deducted if the interest amount exceeds Rs 10,000. For senior citizens, this limit is Rs 50,000.

The bank and your employer will give you the TDS certificates from June 15 onwards. Do make sure to collect that.

The TDS certificates will help you to ascertain that TDS deducted is reflecting against your PAN in the Income Tax Department records using Form 26AS.

Deadline to file ITR for FY 2019-20: July 31

Once tax-saving is completed by March 31, the next step is to file your ITR. The last date to file ITR for individuals and HUFs is July 31 unless extended by the government. If you fail to file your ITR before the deadline ends, then you will have to pay a penalty. If ITR is filed by you after the deadline has expired but before December 31, 2020, then a penalty of Rs 5,000 will be levied.

If the ITR is filed between January 2021 and March 2021, then penalty of Rs 10,000 will be levied. For small taxpayers, whose income does not exceed Rs 5 lakh, maximum penalty of Rs 1,000 is levied.

Linking of PAN-Aadhaar: March 31, 2020

The deadline to link PAN with Aadhaar has been extended to March 31, 2020. Earlier, the deadline to link the same was December 31, 2019. Remember if the PAN is not linked with Aadhaar by the expiry of deadline, then your PAN will become inoperative.

However, government is yet to notify the meaning regarding inoperative.

By CA Shivam Gupta. Originally published on Tax Advisor – Your Own Tax Guide. This article reflects its original publication date; provisions and deadlines may have changed.