ITR to higher pension: Important financial and tax deadlines in July 2023

July brings several important deadlines that you must put reminders for. Firstly, the income tax return (ITR) filing deadline is approaching, which means taxpayers need to ensure timely submission. Additionally, the deadline for opting for higher pension contributions under the Employees' Provident Fund Organization (EPFO) is also a key consideration. 

ITR filing deadline

The deadline to file an income tax return (ITR) for FY 2022-23 (AY 2023-24) is July 31, 2023. It is advisable to file your ITR before the due date. If you miss the deadline, you have an option to file belated ITR. The due date of filing belated ITR is December 31, 2023, for FY 2022-23 (AY 2023-24), unless extended by the government. If the ITR is filed after the due date (July 31) and before 31 December 2023, a late fee will be levied.

 

A late fee will be levied under Section 234F while filing a belated return, according to ClearTax:

Gross total income is up to Rs 2.5 lakh: No Penalty

Gross total income is Rs 2.5 lakh – Rs 5 lakh: Rs 1,000 fee

Gross Total income more than Rs 5 lakh: Rs 5,000 fee

If you file a loss return after the due date, many losses, like business and capital losses, cannot be carried forward for set off in the subsequent years. However, an exception is available for losses from house property that can be carried forward even if you file your returns late.

Deductions/ Exemptions Disallowed: Deductions/ exemptions u/s 10A, 10B, 80-IA, 80-IB, 80-IC, 80-ID and 80-IE shall not be available if you delay ITR filing. These tax-saving benefits are allowed only if the ITR is filed before the original deadline

TDS deducted has to be deposited by July 7
July 15 is another important date when Tax Deducted at Source (TDS) certificates for tax deductions made in May must be issued. Tax deducted or collected in June is to be deposited by July 7, and the Quarterly Tax Collection at Source (TCS) certificate for the quarter ending on June 30 is also typically issued in July. 

Rates increased on select saving schemes 

The government has raised interest rates on select saving schemes by up to 0.3 per cent for the July-September quarter in line with the high-interest rates in the banking system.

The highest increase of 0.3 per cent was for the five-year recurring deposit (RD). During the second quarter of the current fiscal, RD holders would get 6.5 per cent against the existing 6.2 per cent.With the revision, a one-year term deposit with post offices will now earn 0.1 percentage higher point at 6.9 per cent and for the two years tenor -- 7 per cent (up from 6.9 per cent). However, interest rates on term deposits for three years and five years have been retained at 7 per cent and 7.5 per cent. The interest rates for popular PPF and savings deposits are retained at 7.1 per cent and 4 per cent, respectively.

The new rate for the girl child savings scheme Sukanya Samriddhi too stood at the existing level of 8 per cent.

The interest rate on the senior citizen savings scheme and Kisan Vikas Patra (KVP) is 8.2 per cent and 7.5 per cent, respectively.

Higher pension by July 11

The Employees' Provident Fund Organisation (EPFO) has extended the deadline to opt for a higher pension to July 11, 2023. For those who want to opt, EPFO has introduced an online facility for employees to choose higher pension contributions. This can be done through a joint application with the help of the EPFO utility. 

To proceed with the application for a higher pension, the employee needs to provide certain details such as UAN, Name, Date of Birth, Aadhaar number, and Aadhaar-linked mobile number. A One-Time Password (OTP) will be sent to the employee's Aadhaar-linked mobile number for validation of the application.

After the validation process, the employee will be required to accept a disclaimer message as part of the application. Following this, the employee will be directed to the next page of the application where they need to provide information about their previous active PF/pension accounts, including details of bank accounts and contribution information. Supporting documents will also be required to be submitted along with this information.

No extension of PAN-Aadhaar linking

The requirement to link Aadhaar and PAN under the Income Tax law came into effect on July 1, 2017. Since then, the income tax department has extended the deadline to link the two multiple times, with the latest deadline being June 30, 2023. From now on, the PAN card will become inoperative for those who have not linked it yet.  Point to note: While income tax returns can be filed without linking the two, the department will not process the returns until PAN and Aadhaar are linked.

Other consequences of PAN remaining inoperative will be as follows:

(i) no refund shall be made against such PANs;

(ii) interest shall not be payable on such refund for the period during which PAN remains inoperative

(iii) TDS and TCS shall be deducted /collected at higher rate, as provided in the Act.

How to pay penalty to link PAN with Aadhaar

An  individual is required to login to his account on the income tax e-filing website. Once logged in, go to the profile section to see the "Link PAN with Aadhaar" option. Once the required details are entered, you will be required to pay the penalty amount through e-Pay Tax.

HDFC Bank extends Senior Citizen Care FD to July 7

HDFC Bank has extended senior citizen care fixed deposit to July 7, 2023. The highest interest rate offered under the scheme is 7.75% for tenure between 5 years 1 day to 10 years

Tax on overseas remitance has been pushed to October 2023

The government had earlier announced to raise tax on outbound remittance from 5 per cent to 20 pr cent. However, this will now become effective from 1 October 2023, which means you get an additional three months to spend on overseas tours. Investors investing in abroad have three more months to invest overseas paying 5 per cent tax on outbound remittance from India.