Amid the pandemic to ease compliance related burden, government has allowed investments until June 30, 2020 for claiming deductions as part of Section 80C for the FY 20. Further there is also a provision which in case your investment until June 30 cross the Rs. 1.5 lakh mark, you can take the amount over and above the threshold for claiming deduction for FY21.
And within the provision are included investments such as NPS, PPF etc. So, here we tell you what advantage you can take until June 30, 2020, if you maintain any of the 2 accounts.
Easy withdrawal for both lump-sum or partial payment:
This is a one-time facility allowed until June 30 wherein scanned and self-attested documents for withdrawal request are being accepted by the nodal office or PoP service providers via online route. Thereupon the documents are checked for genuineness by the nodal officers or PoPs and subscribers' identity is validated just before authorizing their requests in the CRA or central record keeping system.
There is also the online route where one can upload withdrawal documents in the CRA for starting off with making the withdrawal claim.
NPS regulator PFRDA also allowed withdrawal for Covid treatment given the fact that it is a life threatening disease.
NPS and taxation considering new and old tax regime:
In case a taxpayer opts for the new tax regime when there is a provision to even continue with old tax slab rates, he or she may lose some of the tax advantages in the former case.
So, in this case you can claim deduction for the employer's contribution towards your or employee's NPS account. This is up to 10% of basic and DA regardless of any limit qualifies for deduction. For central government staff the benefit is of 14%.
This is another retirement planning avenue that also allows tax deduction under Chapter VIA. For the same similar facility of making extended payment to claim deduction is allowed until June 30. But one has to give an undertaking, this is even for girl child investment product Sukanya Samriddhi Account that the allowed limit for the FY shall not be exceeded.
However for this deposit made until June 30,2020, March 31, 2020 will be taken into account for making interest payment.
Minimum dues to continue running the account can also be made until June 30:
This is true for SSY and PPF account and this payment for maintaining active status of the account shall not attract any penalty or late for the fy 2019-20. The same applies to all other small savings schemes also.
Extension of PPF account whose accounts were matured on March 30, 2020:
This request of account extension for another block of 5 years can be done before June 30. PPF is a long term investment plan of otherwise 15 years timeframe but in case one does not wants to get their investments in the option liquidated one is given the choice of exercising extension of the account.
Interestingly, now after some of the more investor friendly moves now PPF investor can make deposits any number of times as against the earlier allowed 12 deposits but with a maximum investment limit set at Rs. 1.5 lakh in a financial year.