Clarification on deduction period for subsequent FYs

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This discussion clarifies the tax deduction period for investments made under Chapter VIA-B of the IT Act, specifically for payments made between March and June 2020, following the extension granted by the Finance Ministry. It confirms that deductions for annual recurring payments, like life insurance premiums paid after March 2020 but before the 30 June 2020 deadline, can only be claimed in the financial year the payment is actually due and made, not retrospectively for an earlier year. For example, a premium due in May 2021 will be claimed in FY 2021-22.

Shivansh Kumar

Shivansh Kumar (Querist)
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18 April 2020 Hi,

While we appreciate the Finance Ministry's move to extend the date for making various investment/payment for claiming deduction under Chapter-VIA-B of IT Act to 30 June 2020, however, would like to understand in which period will a tax payer be able to claim the deduction for annual recurring payments of such investment made this year post March 2020 (but before 30 June 2020).

E.g. A person purchases a life insurance on 25 May 2020, whose premiums shall be due on 25 May of every year. Such tax payer will be able to claim deduction for the insurance premium payment in FY 2019-20. However, how will he/ she be able to claim the deduction for FY 2020-21, since premium will be due and be paid on 25 May 2021 (FY 2021-22)?

RAJA P M

RAJA P M (Expert)
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18 April 2020 No... Taxpayers can be claim any one of the FY only...

Shivansh Kumar

Shivansh Kumar (Querist)
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19 April 2020 Thanks for your response. Just to confirm, does the tax payer have an option to claim either in FY 2020-21 or 2021-22, or it it compulsory to claim in FY 2021-22 only?

RAJA P M

RAJA P M (Expert)
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19 April 2020 The extension against lockdown periods only. It's not applicable to all FY. You must be claim as per payments periods except the current extension...

RAJA P M

RAJA P M (Expert)
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19 April 2020 ( since premium will be due and be paid on 25 May 2021 (FY 2021-22)? ) 👈 this one will be claim only in FY 21-22.

Shivansh Kumar

Shivansh Kumar (Querist)
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19 April 2020 Thanks for the clarification :)

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