As we are approaching towards the end of this financial year, there are certain things we should do before the year comes to an end. It is time to ensure that you have your documents and all the pending formalities in place. Tax Planning is important for every taxpayer and the same needs to be done before the end of the year to which Income Pertains. In Addition to Tax Planning Assessee needs to Collect Relevant Supporting and Calculate His Tax Due and Pay the same. Here we have listed things which Assessee needs to do before the end of the year i.e. on or before 31st March , which are as follows :-

1. Pending Income Tax Returns for 2014-15 and 2015-16 to be filed as soon as possible:

In case you missed the filing of the preceding previous year’s tax returns, it is not late yet. The last date as per the extended time to file the late returns for FY 2014-15 is 31st March 2017. However, the chance will be gone unless you file the returns before end of this financial year. There is a big misconception that if there is no tax payable, one need not file the tax returns. In case you did not file your tax returns because there is no amount of tax payable for FY 2014-15, you would be advised to file them right away. In case if there was no tax to be paid from you for that year, Income Tax will not levy any penalty or interest charges for filing of returns this late. However, in case of tax payable, a small penalty would be payable. Though the general due date of filing of income tax returns is 31st July of the year following the financial year, a few of you wouldn’t have been able to file the return by the due date and then must have forgotten. Please file your pending income tax return for the financial year 2015-2016 by 31st March 2017. In case you have taxable income and fail to file the returns for the financial year 2015-2016 by 31st March 2017, the assessing officer can levy a penalty of Rs. 5,000 for this default. However, the assessing officer cannot do so without giving you an opportunity to explain the reason for such failure. 

2. Invest in 80C to claim full benefit of saving 45k Tax and submit to the employer.

If your income is taxable then you can get tax benefit up to Rs 45,000/- if you invest amount of Rs 1,50,000/-in investment options under 80C. Section 80C is one of the most commonly used deduction section by all the type of taxpayers from claiming a deduction of Rs.1,50,000 as prescribed by the section. These deductions are allowed to all the types of tax payers for investments in specified investments like Fixed Deposits, National Savings Certificate, Public Provident Fund, Mutual Fund etc. If you have not invested in these investments which help claiming a deduction of Rs. 1,50,000, you should doo it now as still one month left.

Submit to your employer the proof of investments/expenses that you have incurred to claim deduction under Section 80C. These includes receipt for insurance premium paid, deposits made in your public provident fund account, investment made in equity-linked savings schemes, National Savings Certificates purchased, children’s tuition fees paid, PPF, Tax Saving Bank Fixed Deposit, ULIP  etc. Your employer would require the details and the documentary proof to provide you the deduction under Section 80C. Delay in submission of investments proof may lead to excess deduction of TDS though you can claim refund later on but still timely submissions are better.

3. Switch your fix deposit to RBI Bonds

In case you are having Fixed deposit and you need to remain invested for few years, it is better to switch to RBI bonds which will offer you 8% rate of interest for 6 years.

Read more at Why should you invest in RBI bond before March?

4. Review your term Insurance

You need to review your insurance requirement for adequacy of risk coverage. In case of individual the risk cover should be 10 times of his income. For example is person is earning 10 Lakhs per annum, he is ideally require insurance cover of 1 crore. Further in case of depends are more additional insurance can be taken

5. Advance tax to be paid.

For salaried employees, TDS is deducted by the employer and paid to the Income Tax Department on account of the income generated by each employee during the course of the year. Thus as an employee, you need not worry about ‘advance tax’. It is only the self -employed tax payers who normally have to pay advance tax. However even in case of salaried employees if you have any other taxable income for the year like capital gains, interest on fixed deposits etc. you have to pay advance tax on such income in case such income is not reported to your employer. Please note that you need not pay any advance tax in case you advance tax liability does not exceed Rs. 10,000 for the year. Moreover in case you are a senior citizen and are not engaged in any business or profession, you need not pay any advance tax. In the above two cases the tax can be paid while filing your income tax return.

6. Claim additional deduction of Rs. 50,000 for investing in NPS.

Very few taxpayers are aware about this deduction as this is the newly added additional deduction in Budget 2015. This is a very useful deduction as it only not provides additional deduction but also helps in retirement planning. This deduction of Rs. 50,000 is allowed under the section of 80CCD and is over and above the deduction of Rs. 1,50,000 under the section 80C.


7. Claim deduction for the House Rent Allowance.

If you are claiming deduction for house rent allowance, then ensure that you have submitted the necessary details and proofs like rent receipt, etc, to your employer for claiming the benefit. you also needs to submit PAN of the Landlord if the Total Rent During the year exceeds Rs. 1,00,000/- . Further if annual rent paid by the  exceeds Rs 1,00,000 per annum, it is mandatory  to report PAN of the landlord. In case the landlord does not have a PAN, a declaration to this effect from the landlord along with the name and address of the landlord should be taken by the Assessee for his records.

8. Make your minimum contribution to PPF/NPS/SSA accounts.

If you have PPF/ Sukanya Samriddhi Account account you need to contribute at least Rs 500/1,000 per financial year to avoid account being classified as dormant. You can make the account active you would need to pay a penalty of Rs 100 and contribution of Rs 500 for each year of missed payments. In case of NPS accounts too, you need to deposit at least Rs 1,000 every financial year. In case you have not done it till now go ahead and do it as non-payment leads to account being classified as “frozen”. You can make the account active by paying a penalty of Rs 100 and depositing Rs 500 as one installment.Though the penalty is not high in both the cases but it would lead to inconvenience and might require some documentation and visit to respective institutions. So make sure you have paid the minimum amount in NPS, PPF and SSA.

9. Capital Gain Calculation on Shares and Immovable Property
If you have sold/transferred any asset like house property, shares, mutual funds etc. then compute the capital gains and check the exemptions available to you. A distinction is to be made between long term and short term capital gains which attract different tax rates.

10. Deductions under 80G.

Individuals can get the tax deduction for donations made also. You will get the reduction only if the donee trust or institution is registered under Section 80G. Collect the receipt for the donation amount to claim the deduction.

11. Collect TDS and Home Loan Certificates

You need to collect all your TDS certificates (tax deducted at source) from banks and your previous employer. This will help you to find out the interest income on bank deposits and pay balance taxes.

12. Exchange Old Notes

Banned notes of Rs 1000, and Rs 500 can be exchanged at RBI offices till March 31 for all NRI who has not yet exchanged. This is the deadline to change old notes.

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CA Chirag Chauhan

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