Tax-saving investments for FY 2019-20 allowed till June 30

The announcement is one among the several made by the Government of India to battle the crisis triggered by the novel coronavirus. As a taxpayer, it gives you the flexibility to complete your tax-saving exercise if you haven’t done it due to the pandemic.So, if you are yet to exhaust the maximum permissible limits under various sections of the Income Tax Act, 1961, for FY 2019-20, you can do so by making the relevant investments until June 30, 2020.However, note that the announcement doesn’t mean an extension of the financial year, i.e., the fiscal year remains the remain (April 1, 2019 - March 31, 2020). Note that due to the ongoing pandemic, many financial institutions, including banks, mutual fund houses and insurance companies are working with limited staff.Though they have taken their services online, yet many especially senior citizens aren’t much comfortable using digital channels for making tax-saving investments. For them, the announcement will provide the much-needed relief and peace of mind.

It’s important to note that in case you have made tax-saving investment after March 31, 2020, and wish to claim the deduction for the same in the ongoing fiscal, i.e., FY 20-21, you can do so. As a taxpayer, you can choose the financial year for which you want to claim the deduction.However, you must ensure that you don’t end up claiming double deduction on the same investment across both financial years.

While the window is given taking into account the hardships faced by common man, it’s crucial to use it judiciously. Just because there’s a leeway, you shouldn’t rush into making tax-saving investments. Find out if it aligns with your financial goals or not.Often in the bid to lower tax liabilities, tax payers end up making flawed investment choices that don’t match their objectives and bind them to long-term commitments, difficult to address. Therefore, you must exercise due diligence and if your tax-savings are in place, you can afford to give this window a miss.Have a holistic picture of your goals, cash flow, risk appetite and investment horizon before making fresh tax-saving investments. Exercising due diligence can help you make an informed choice.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.