As the clock nears the end of the current financial year, closing on March 31, one should complete financial obligations and make the necessary investments to get the benefit of additional tax savings. Here is a to-do list to be completed before March 31.
1. Claim deductions up to Rs 150,000 for expenses incurred and investments made under section 80C of the Income Tax Act, 1961
The tax regime allows a deduction of up to Rs 150,000 for certain expenses made by an individual, which interalia include the following:
In case there are no expenses on the above, one may consider making the following investments before March 2017 to avail the benefit of deduction:
Recently, the government introduced a new provision wherein an individual is allowed additional deduction of Rs 50,000 for investment in the NPS account. This deduction is over and above the deduction allowed under section 80C of the Act.
3. Submit investment proofs to your employer
In case an individual is a salaried employee, he/she would be required to submit investment proofs (such as PPF or LIC premium receipts) to the employer so that the company can consider deduction of the same while computing tax to be deducted from the salary income. Apart from submitting investment proofs, the employee would also be required to submit the following proofs to claim exemptions for the expenses incurred:
In case an individual has made any donation during FY2016-2017, he/she will be entitled to a deduction to the extent of 50 per cent or 100 per cent of the donation amount depending on the type of the trust. Hence, one may make donations before March 31 to any eligible charitable trust and get the deductions.
5. Education loan matters
In case an individual has taken an education loan for higher education of self, spouse or children, he/she can claim deduction of the interest paid under section 80E of the Act.
6. File time-barring tax returns
In case an individual has not filed his tax return for FY 2014-2015 (which was due by July 31, 2015), March 31, 2017, is the last opportunity to file tax return.
Further, if an individual has not filed the tax return for FY2015-16 (AY 2016-17), he/she may consider filing the same on or before March 31, 2017, to avoid a penalty of Rs 5,000.
Given that only a few days are left before the current financial year ends, one must compute the tax liability (considering necessary deductions towards expenses and investments made) in advance and make necessary investments to minimise the tax liability.
Homi Mistry is Partner, Niji Arora is Senior Manager and Tarika Goel is Deputy Manager at Deloitte Haskins and Sells LLP
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