The year 2019 is nearing its end. As you make plans for the upcoming year, it may be wise to close settle some tasks due on 31 December 2019.
Here are 3 such financial tasks to complete before the start of 2020:
1. File Income Tax Returns
If you failed to file your income tax returns (ITR) for the financial year 2018-19 before the deadline (that was extended to 31 August), you can still file it. While the last date to do so on paying a penalty is 31 March 2020, filing it by 31 December will help you save on that late penalty.
In Budget 2017, late ITR filing penalty was introduced under Section 234F of the Income Tax Act.
If the ITR for FY 2018-19 (assessment year 2019-20) is filed after 31 August 2019 but before 31 December 2019, a penalty of Rs 5,000 will be imposed on the taxpayer.
If the ITR is filed after 31 December 2019 but before 31 March 2020, a penalty of Rs 10,000 will be imposed on the taxpayers.
On taxpayers whose total income does not exceed Rs 5 lakh, the late fee is fixed at Rs 1,000, irrespective of when it is filed.
If you miss the 31 March deadline as well, there is no option to file ITR for 2018-19 unless you receive a notice from the tax authorities to do so.
2. Pay Advance Taxes
The last day to pay the third installment of advance tax for FY 2019-20 was 15 December, however, the deadline was extended to 31 December 2019 for residents of the north-eastern states of India amid unrest in the region over the amended Citizenship Act.
Also known as pay-as-you-earn, advance income tax payment allows taxpayers to pay the income tax due in installments rather than a lump sum at the end of the year. Those with a total tax liability of Rs 10,000 or higher in a financial year are required to pay advance tax. Senior citizens who are above the age of 60 years and do not run a business are exempt from paying advance tax.
For those earning salaried income, their respective employer will take care of necessary deductions to be made from salary, as per income tax rules.
3. Link your PAN to Aadhaar
The Income Tax Department made it mandatory for taxpayers to link PAN to Aadhaar, especially for those who file ITR, unless specifically exempted.
The deadline to link the two was extended from 30 September to 31 December 2019. News reports suggest that on failure to link, one's PAN could become invalid starting 1 January 2020.