Ask Us, on investments — October 12, 2020

The government issued a Notification dated June 24, 2020 granting relief to assessees by extending the due dates for filing ITR for AY20-21

Q. I am a senior citizen. I am planning to buy a senior citizen scheme jointly with my wife to the tune of ₹15 Lakh for the FY21 and ₹6 lakh in FY 22, respectively. Am I eligible to get I-T benefit for FY21 and FY22, respectively?

Kalyan Kumar Dey

A. Senior citizens can invest in Senior Citizens Savings Scheme in order to avail of deduction of the amounts deposited under the said scheme up to ₹1.5 lakh in an assessment year under Section 80C of the Act, provided there are no other specified investments or expenditure under Section 80C and underlying Section 80CCE.

Q. I work in a Indian IT firm and was assigned onshore work in U.K. under a work permit from January 2018. My assignment got completed and I returned home in January 2020. I did not receive any Indian pay and there was only U.K. pay (but there was an Indian component to it). For FY18-19, my tax in India was 0. But for FY19-20, tax was deducted in India for whole year. I paid tax in the U.K. also for two years. Does this count for dual tax and can I claim my tax paid in India? Also, my colleague returning after February 2020 did not pay any tax in India.

Srivatsan

A. For the purposes of taxation in India, for the FY18-19, you were an NRI and for an NRI, only incomes accrued and or received in India are taxed in India as per the residential status determination of the Income Tax Act. As there has been no tax deductions in India for FY18-19 and taxes were paid as per U.K. laws for the income earned and received in U.K., the situation of double taxation does not arise for this year.

For FY19-20, as per the residential status determination provisions, you still will be an NRI as you were outside India for more than 180 days in the financial year and were outside India for the purpose of employment due to which income tax does not arise in India for the income earned in U.K. You may contact your HR department to understand the reason for deducting the tax for the whole year. Indian income tax return has to be filed for any income received in India for this year. If any excess Indian tax deduction is made by your company, the same can be claimed as refund. However, it is to be noted that any excess tax paid in U.K. cannot be claimed as refund in India or vice versa.

Q. I am a very senior citizen and so, I am exempt from paying advance tax. I calculate self-assessment tax and pay it in the stipulated month. Now that the last date of submission of I-T return has been shifted to November 30, can I pay the self-assessment tax in November and file my I-T return by the same date?

K.A. Narayanan

A. The government issued a Notification dated June 24, 2020 granting relief to assessees by extending the due dates for filing ITR for AY20-21 (FY 19-20) to November 30, 2020. However, a proviso in the notification and a clarificatory press release stated that penal interest for non-payment of self-assessment tax within the original due dates — in your case July 31, 2020 — will be applicable if the self-assessment tax liability exceeds ₹1 lakh. If your self-assessment tax liability exceeds ₹1 lakh, it is advised that the same be discharged along with interest as soon as possible. The return filing may be done at a later date but before November 30, 2020.

This reply is based on the developments and the announcements up to August,21 2020.

(The author is a partner, GSS Associates, Chartered Accountants, Chennai)

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