Remember to complete these 10 financial tasks before March 31

In this topic, we cover 10 tax-related items that are crucial and need to be completed before March, 2020.

March 20, 2020 10:52 IST | India Infoline News Service
Nearly everyone dreads the beginning of March as it is almost synonymous to getting your tax work in order. Given that we are nearly 10 days away from the last day of the fiscal year, it is essential that we have a checklist of the financials we need to put in place before the end of this month. In this topic, we cover 10 tax-related items that are crucial and need to be completed before 31st Mar 2020.
  1. Filing tax returns or revising previous versions: Generally, the last day to file a return for the fiscal year 2018-19 is July, 31 2019.  In case you haven’t done the same, you can file a late return for the same before March 31, 2020. Note that you will also have to pay a fine for the late filing and taxpayers will not be able to file tax returns if they miss this deadline. A late filing for taxable income above Rs5lakh attracts a penalty of Rs10,000. However, if the tax payer’s income is below Rs5lakh, the penalty is Rs1,000. Do not avoid filing your return to avoid the penalty. If the tax to be paid is over Rs10,000, and has not been filed, the tax payer could face prosecution or penalty or both in some cases. In case you get to know that you have committed an error or omission while filing an income tax return, it is possible for you to rectify the mistake by filing a revised return. You can file the revised return for the year 2018-19 by March, 31 2020.
  2. Review your capital gains: Since FY2018-19, long term capital gains (LTCG) tax is applicable on capital gains above Rs1 lakh in equities. For income tax purposes, equity held for over a year is considered as a long-term investment. In case you have incurred capital gains during the year, it is better to pay the capital gains tax before March 31, else you may have to pay it with interest at the time of filing of the return. Another hack that you can apply is to sell-off your investments to the extent of Rs1lakh before March 31, 2020 and then buy them back in the next fiscal year. Though you will still have capital gains, this will reset your buy price. In this manner, you will save up on your future tax liability.
  3. Submit form 15G/15H: If your annual income is below the taxable slab, you need to submit form 15G/15H with your bank in order to avoid TDS (tax deducted at source) deduction on the interest earned. Banks generally deduct TDS in case the interest income is more than Rs40,000 (limit raised from Rs10,000 in the latest budget) across the accounts. A 10% TDS is deducted if PAN details are available. It is 20% if the bank does not have your PAN details. To avoid this, you need to submit form 15G/15H forms with your bank. Form 15H is for senior citizens (60 years or older), Form 15G is for everybody else. These forms must be submitted at the start of the financial year. If you missed submitting them, then you can claim a refund by filing an income tax return.
  4. Link PAN to Aadhar: You need to link your permanent account number (PAN) to your Aadhaar for the filing of income tax return. Under the Income Tax Act 1961, linking PAN to Aadhar is mandatory. The government had extended the last date to link Aadhaar with PAN. The final deadline is now March 31, 2020. If you fail to link your PAN and Aadhaar, the Income Tax Department can penalise you up to Rs10,000 for it.
  5. Income declaration in case of job change: If you have changed job during the financial year, it is important that you declare your income for the previous employer to the current employer. Your employer calculates your TDS basis the salary they pay during the year.  So, the employer will first give you the benefit of minimum exemption limit of Rs2,50,000 and then apply tax slabs on your income. If the new employer has no clue about your income from old employer, he may still end up giving you this minimum exemption again or apply slab rates incorrectly. In this case, while filing of return you will have to pay the additional tax in one go which may stretch your finances. Therefore, declare all the details regarding the incomes and tax deducted by the previous employer. After you submit Form 12B, your employer will issue you a consolidated Form 16 which will be required at the time of filing of income tax return.
  6. Invest under PM Vaya Vandana Yojna: The deadline to avail the investment benefit under the Pradhan Mantri Vaya Vandana Yojana is March 31, 2020. Unlike other annuity schemes that offer a pension for life, this scheme is for 10 years and gives assured returns to senior citizens.
  7. Ensure to insure: Given the turbulent and uncertain times we live in, it is prudent to apply for insurance. Life and health insurance are crucial to everyone’s financial portfolio. Invest in a health insurance for yourself and your family. Medical expenses are not things we can predict many a times, and neither can we avoid such expenses. In order to be safe, it is a must to buy a health insurance. If you buy a plan before March 31, 2020, you avail various exemptions on the same. Similarly, it best to insure your family by taking a life insurance. Term plans are the best form of life insurance because you get a high cover for a low price. Premiums of term plan may rise by up to 20% from 1 April due to a revision in reinsurance rates.
  8. Avail PMAY on home loans: Under the government's Pradhan Mantri Aawas Yojana-Urban scheme, eligible first-time homebuyers can get an upfront credit-linked interest subsidy while availing a home loan for an affordable home. This scheme is implemented in four income categories i.e. Economically Weaker Sections (EWS), Low Income Group (LIG), Middle Income Group-I (MIG I) and Middle Income Group-II (MIG II). While homebuyers falling under the EWS and LIG categories can avail this benefit until March 31, 2022, those falling under the MIG I and MIG II categories can do so only until March 31, 2020.
  9. Check the 26AS form: Your tax credit statement or Form 26AS shows the TDS (tax deducted at source) deducted from various incomes during the year. You need to check that the TDS deducted has also been paid to the tax department to avoid any penalty or hassle.
  10. Tax saving investments: There are various exemptions and deductions that a tax payer can claim before filing tax returns for the year. For this, you would need to make the investments before March 31. You need to assess ho how much have invested under Section 80C after accounting for your employee provident fund (EPF), tuition fees paid for self and child education, life insurance premium paid, etc. If you have still not maxed out on the Rs1,50,000 tax exemption limit that you can claim under section 80C of the Income Tax Act, you can increase your contribution towards PPF or NPS, or opt for a health insurance and life insurance. There are certain other sections such as 80D under which you get a get deduction against the health insurance premium paid up to Rs25,000. You can also claim an extra deduction of Rs50,000 over and above section 80C by investing national pension scheme (NPS).

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