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March 31st ? Know it’s importance!

Updated on: 23 Nov, 2023 01:22 AM

Have you ever found yourself wondering why March 31st is so important?

Well we are not here to tell you that it's the last day of financial year or last day for depositing old 500/1000 rupees note with RBI. Now you must be thinking then what??.

To be totally honest we just wanted to tell you that you can save more money from taxes and that this blog might prove to be one of the best thing you read today.

You think we are exaggerating? well here's a list of things you need to take care of before 31st March arrives:

Save Money on Taxes

Yes it's true! you still got some time to reduce your tax liability for the year. You can make tax free investments or incur little eligible expenditure and fully claim the benefits of various tax deductions available under the Act.

NOTE: If by any chance you have changed your jobs during the year, remember to report your income from your previous employer to your current one before March 31st. So that current employer will aggregate the incomes and calculate TDS properly avoiding any last minute hassle.

The list of Income tax Deductions for tax saving under the ACT are:

a) Section 80C- An Investment Tool to Save Taxes

Under this section, you can claim a maximum deduction of Rs. 1,50,000 from your Gross Taxable amount and save your hard earned money on taxes. Let's begin with the most popular deductions u/s 80C:

  • Life Insurance Premium: you probably know that premium paid for life insurance of own, spouse or children is eligible for deduction.
  • Public Provident Fund (PPF): We all make Contribution towards PPF account and is eligible for deduction. Minimum Contribution Rs. 500 and maximum contribution Rs. 1,50,000.
  • Unit Linked Insurance Plan (ULIP): same as Life Insurance Premium.
  • Equity Linked Saving Scheme (ELSS): You could save your money on taxes by making an Investment in ELSS-Equity Linked Saving Scheme of mutual funds. As well as this will provide you benefit of capital appreciation.
  • National Savings Certificate (NSC): You can purchase NSC from post office but remember that it comes with a lock-in period of 5 years.
  • Sukanya Samridhi Account: You know you can secure future of your girl child and also save taxes on the investments made for such a goal? The minimum investment in this scheme is Rs. 1000 and maximum investment is Rs. 1,50,000.
  • Fixed Deposit: These serves as the easiest way to park your savings and additionally you get the benefit of tax deduction only if the tenure is of 5 years. BEWARE interest earned from FDs is taxable.
  • Home Loan Principal Repayment: You can claim deduction only for principal repayment of home loan. the reason behind, interest paid on home loan does not qualify for deduction u/s 80C. I bet you were not aware of this!

b) 80CCG- Rajiv Gandhi Equity Saving Scheme (RGESS)

You can save upto Rs. 50,000 by investing into this scheme. So what makes it so special? The catch is that scheme comes with a fixed lock-in period of a year and flexible lock-in period of 2 years. You need to fulfill all the conditions of being a New Retail Investor to be eligible to invest under the scheme.

Since the scheme has failed to gain popularity amongst investors, the government has planned to discontinue the scheme from the coming FY i.e. FY 2017-18. So it is your LAST chance to claim the benefit of additional tax deduction of Rs.50,000. Grab the chance and Make the most of it!!

c) 80D- Medical Insurance Premium

Here's the thing- you can save your taxes on Medical Insurance premium paid for a policy taken for yourself as well as your family and dependent parents. The maximum you can save under this is Rs. 60,000.

ENSURE to make payments through modes other than cash, as cash payments are not eligible for tax deduction under the section.

d) 80G- Donations

Yes you read right! donating money for noble cause could give you peace as well as save you taxes. But not all donations qualify for tax deductions. So ensure that the organization you are donating to can provide you tax benefits on the money you are donating also make sure to keep the receipts of donation as it is required by the Income Tax Department. Cash donations above Rs.10,000 do not qualify for tax deductions.

Last Golden chance to File Income Tax Return for AY 2015-16 (FY 2014-15)

If you have not yet filed the Income Tax return for the FY 2014-15, then it is your last chance to file belated return for the year. Post this date, no Income Tax Return for the FY 2014-15 will be accepted by the department. So ensure not to Miss it!

File your Belated Return for AY 2016-17 (FY 2015-16)

Well you know what? Surprisingly Life may not give you a second chance but Income Tax does!!

Yes, if you have failed to file your income tax return for the FY 2015-16 do not panic, you still have a second chance to do so. Belated Return as the name suggests, is the return filed post due date mentioned in the Act. Filing your return for the FY 2015-16 before March 31st 2017, would save you from a penalty of Rs. 5000 u/s 271F of the Act.

Pay your Advance tax liability before March 31st

Although the due date for paying your last installment of Advance tax was on March 15th , but just in case you have missed it then take consider this as a reminder. You can assess your taxable income for the year through our tax calculator. Pay your advance tax soon so that so you can save some money on interest on short payment or late payment of advance tax.

To know more, read our blog Advance Tax- What? Why? When?

Get your proofs handy!

Since the income tax return is filed through an online portal you may not be required to submit any proof but you should always try and document all the important receipts to substantiate the expenses and deductions claimed.

List of few such documents are:

  • Donation Receipts
  • Rent receipts to claim the HRA benefit
  • Report your income from previous employer under form 12B to the current employer so that your taxes are deducted properly.
  • Bank statements for claiming appropriately deduction of interest u/s 80TTA.

So as we told you, we were here to help you to save your precious money. Now take the next step and check what is pending on your checklist before March 31st, 2017.

We would love to know your thoughts. Please mention your query in the comment section!

CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.