Things to do before March 31
India observes financial year from April to March. March month is the last chance to declare tax investments to save taxes. But there are other activities too other than declaring LIC Investments. :)
Let’s point out few of them through this post.
- Exchange / Deposit old 500/ 1000 notes. Demonetization of old 500 / 1000 notes is one of the most debated, controversial and bold move by the Indian government to eradicate corruption, counterfeit notes, and funded terrorism. Whether it’s success or failure that’s based on how you look at it. But that’s not the point I want to discuss here. Because of such event, we are expected to get our old notes either exchanged or deposited to the bank account. Dec-2016 was last chance to get it exchanged or to deposit at banks. And post that deadline, still if you are left with any such notes then do visit nearby RBI branch along with identity proof to get them exchanged, by 31st March 2017. Post-March month exchange will be relatively tough as it is expected by RBI to ask for proof of why it was not exchanged within given time and there may be some penalties on such late exchange.
- Submit last two years tax returns if you have not done yet. There will be late filing charges, but after March month end you won’t get a chance even with penalties.
- Collect home loan contribution certificate, and submit it for tax savings on interest payment and premium payments. Collectively they will bring down your taxable income by 3.5L if it’s first home, otherwise, full interest payment is tax deductible for this financial year (2016–2017) and from next year onwards it’s going to be capped to 2L.
- Pay advanced taxes, if you are running own business.
- Contribute to your 80C Investments, if not done already. And ensure to declare them to your employer so that such amount gets reflected in your Form-16.
- Ensure to despite minimum specified amount (500, as of 2017) to PPF account to avoid penalty of 50 rupees. In case you’re about to complete maturity time, 15 years, then do ensure to submit extension form to extend PPF for 5 more years.
- Ensure to contribute minimum, 6,000 annually as of 2017, to keep NPS account active.
- Collect all medical bills/receipts and ensure to raise claims, if eligible.
- Collect all donations receipts eligible for tax savings and submit to the employer for tax saving.
- Declare any and all remaining tax saving investments to employer so that they get reflected in Form-16.
I am sure this is not the comprehensive list, but this list should be enough to get you started. Please ensure you do not go overboard with any investment, as I discussed in Bucket’s theory, extra investments will not help you save tax but you will surely be stuck with bad investment for a long time. It’s not necessary to declare tax investments to the employer, but it will get reflect in Form-16 if you do and it will make Income Tax returns filing easy. Otherwise, you could do them at the time of filing Income Tax returns.
Last, but certainly not the least, start planning tax savings investments for next year, RIGHT NOW.
Image Credit: Hartey Wealth Management, UK.
Originally published at The Simple Personal Finance.