After multiple extensions, 30 June 2023, was the last day for PAN-Aadhaar linkage. For those who hadn’t completed the process before the last date, the PAN should’ve become inoperative from 1 July 2023.
New Delhi: The month of July has began with some changes in interest rates of small saving schemes. This month is critical with regard to tax-related matters. Let’s check what are the five major financial tasks require attention in July 2023.
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Income Tax Returns (ITR) submission:
You should file your ITR for FY 2022-23 on or before 31 July 2023. You will have to pay a late fee if you miss the deadline. Once you file it, you should also ensure that you verify it. The maximum time to confirm the return is 30 days from the filing date.
PAN-Aadhaar Linking
After multiple extensions, 30 June 2023, was the last day for PAN-Aadhaar linkage. For those who hadn’t completed the process before the last date, the PAN should’ve become inoperative from 1 July 2023. It means that higher tax will be deducted at source (TDS) and tax collected at source (TCS), no refund against the inoperative PAN, and no interest payable on the refund amount for the period the PAN remains inoperative.
In order to make PAN operative again, you can link it with Aadhaar by paying a late fee of Rs 1000. The activation will take 30 days to be effective from the date of application.
In order to file ITR, PAN-Aadhaar linking is optional,
Notably, for filing the ITR, the linking is optional, as per the Income Tax Department. Also, for senior citizens aged 80 years and above, PAN and Aadhaar linking is not mandatory.
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Higher EPFO Pension
The last date to apply for a higher pension has been extended by Employees’ Provident Fund Organisation (EPFO) for the third time on 26 June 2023. Now the deadline is 11 July 2023. If you wanted to apply but could not, there is still time to complete the formalities.
Last month, the EPFO published a detailed set of Frequently Asked Questions (FAQs) to help its users in the application process.
Revised Overseas Remittance Taxation beginning October 1
The government has raised the tax on outbound remittances from 5 per cent to 20 per cent. This adjustment, however, will take effect on 1 October 2023. Individuals now have an extra three months to enjoy foreign travel with the existing 5 per cent tax rate.
Increased interest rates on Small Savings Schemes
The government, in the last week of June, announced a marginal increase in interest rates on select small savings schemes for the period of July to September. These small savings schemes offered by government are popular due to their secure nature and attractive interest rates. The rate hike ranges from 10 to 30 basis points (bps) across various schemes.
Small savings schemes offered by the government are popular among retail investors due to their secure nature and comparatively higher interest rates compared to other investment options.
As per the revised rates, the 1 year and 2 year term deposits will see an increase of 10 bps, while the 5-year recurring deposit schemes will witness a rise of 30 bps.
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The interest rate on the 1-year deposit scheme has been hiked to 6.9 per cent, while the 2-year deposit scheme has been hiked to 7 per cent.
Meanwhile, the interest rate on the 5-year recurring deposit has been hiked to 6.5 per cent.
The new rates will be applicable from 1 July 2023.
