Income Tax saving with PPF, ELSS, other 80C options for FY 2020-21: Deadline ends soon

Income Tax saving with PPF, ELSS, other 80C options for FY 2020-21: Deadline ends soon

By Chirag Nangia

Since the government allowed investments under Section 80C till June 30, for FY 19-20, when should we make tax-saving investments for FY 20-21?
—Kapil Kumar

March 31 of a financial year is generally the last date for making investments in tax-saving instruments, be it insurance premiums, ELSS mutual funds, PPF, NPS, medical insurance, etc. Considering the disruptions caused by lockdown and financial hardship/ cash flow issues faced by taxpayers due to reduced business activity, due date for all such investments has been extended to June 30, 2020.

Therefore, for investment made post March 31, 2020 till June 30, 2020, deduction under Section 80C can be claimed either in FY 2019-20 or FY 2020-21, at the option of the taxpayer (subject to monetary limits). However, it may be noted that investments made during this period should be counted for only one of the two financial years (i.e., either FY 2019-20 or FY 2020-21 and not both).

My daughter, after completing her master’s degree in UK (an NRI for FY20), has secured a job in Isle of Man (a self-governing British crown dependency). How can she declare her NRI status for AY 2020-21 to mutual funds/banks/tax authorities in India?
—Praveen Godbole

Residential status can be disclosed before the income tax authorities in the Income Tax Return form. ITR has to be filed if total income exceeds maximum amount not chargeable to tax (i.e. Rs 2.5 lakh) in a financial year. Residential status can be disclosed before the banks by visiting the bank branch.

In case of NRIs, only income which accrues or arises in India is subject to tax in India. Thus, return of income shall only be required to be filed if income in India exceeds Rs 2.5 lakh. Further, being a resident of Isle of Man, your daughter shall have to comply with the domestic laws of that country and if global income is taxable there, she shall have to pay the tax on income earned in India as well. India and Isle of Man do not have a DTAA.

However, since your daughter’s income in India is less than the taxable limit, she shall be required to pay taxes on the Indian income in Isle of Man only, hence no double taxation. Go for profess-ional help to determine and minimise the incidence of tax in Isle of Man.


Source:- financialexpress