As we enter the month of July 2023, there are several important changes taking place in the financial landscape that earning individuals need to consider. These changes include the last date for filing income tax returns (ITR) and the deadline for linking PAN with Aadhaar. Additionally, the Employees’ Provident Fund Organisation (EPFO) has extended the deadline for choosing a higher pension. Let’s delve into each of these updates:
ITR Last Date: The due date for filing income tax returns for the financial year 2022-23, or assessment year 2023-24, is 31st July 2023. It is crucial for individuals who need to file their ITR to do so by this deadline. Failure to file within the given time frame may result in a late fee charge of up to ₹5,000. According to income tax rules, if you miss the initial due date but file by 31st December 2023, you will be subject to a late fee of up to ₹5,000 if your income exceeds ₹5 lakh. However, if your annual income is less than ₹5 lakh, the late fee will be ₹1,000.
PAN-Aadhaar Link: The deadline for linking PAN with Aadhaar was 30th June 2023. Individuals who have not yet linked their PAN and Aadhaar will still be able to file their income tax returns. However, the income tax department will not process their returns until the PAN is linked with Aadhaar. Those who have failed to complete the PAN-Aadhaar linkage will face penalties, and their PAN cards will become inoperative. To remedy this, they must link their PAN with Aadhaar and pay a penalty of ₹1,000. Prior to 30th June 2023, the penalty amount was ₹500.
Chance for High EPFO Pension: The EPFO has extended the deadline for applying for a higher pension from 26th June to 11th July 2023. This means that EPFO and EPS members who joined before 1st September 2014 and missed the opportunity to apply for a higher pension now have one more chance to do so by the given deadline in July 2023. For those who retired before 1st September 2014 and had opted for the higher pension option, it is necessary to validate the provided information.
Taxation on Overseas Remittance: The Government of India had previously announced an increase in the tax on outbound remittances from 5% to 20%. However, this change will now take effect from 1st October 2023. This means that individuals have an additional three months to spend on exotic overseas tours. Investors looking to invest abroad also have three more months to make their investments while paying a 5% tax on outbound remittances from India.
Small Savings Interest Rate: The central government has raised the interest rates of select small savings schemes for the July-September 2023 quarter. The interest rate on the national savings certificate (NSC) has been increased by 70 basis points (bps), which is the highest hike among all the instruments in this revision. Additionally, the interest rates for schemes such as the 1- and 2-year post office time deposit and 5-year recurring deposits have also been raised.
In conclusion, as we enter July 2023, it is important for earning individuals to be aware of the various financial changes taking place. These include the last date for filing income tax returns, the deadline for linking PAN with Aadhaar, the opportunity to apply for a higher EPFO pension, the revised taxation on overseas remittance, and the increased interest rates on select small savings schemes. By staying informed and taking appropriate action, individuals can navigate these changes effectively and manage their finances efficiently.