March 31st is just a few days away. This means that many of your financial tasks, which you could not complete during the year, need to be completed during the next few days. Here's what you must do.
Are you an income tax payer and have not completed some of your financial and tax-related tasks yet? You need to hurry up as it is already March 30 and the D-Day of March 31st for finishing your financial tasks for FY2017-18 – like filing belated tax returns and making necessary investments – is just a day away. Sadly, it is also a holiday time and most offices in India will remain closed this week. Thankfully, income tax offices will remain open till March 31st and some banks will also work on Saturday. You can also do a few things online, like filing ITR or paying the premium of your insurance policies. So, you need not lose hope as you can still do many things if you so desire.
Here we are taking a look at a few financial and tax-related tasks which you should complete before March 31st:
1. Filing belated tax returns
If you haven’t filed your income tax return or want to revise your original returns for FY 2015-16 and FY 2016-17, then this is the last opportunity for you to do so. Ensure that you file your belated or revised returns by March 31, 2018. The Income Tax Department has also been advising taxpayers for some time to ‘Come Clean’ and file their belated or revised tax returns latest by March 31, 2018, or be prepared to face penalty or prosecution. Thankfully, the income tax offices and ASK Centers will also remain open this week (on 29th, 30th and 31st March) for the convenience of taxpayers.
2. Depositing the minimum amount in your PPF account
If you have an active PPF account, you need to ensure that you deposit a minimum amount of Rs 500 in a year to keep it operational. The current financial year (2017-18) ends on March 31. “So make sure that you have deposited at least Rs 500 in the ongoing year. It’s not necessary that you deposit this amount at one go. You just need to make sure that the sum of all your deposits in the current financial year is not less than Rs 500. Otherwise your PPF account will become inactive and you will have to pay the required fine to make it operational,” says Chetan Chandak, Head of Tax Research, H&R Block India.
3. Deducting TDS on rent payments
If you live in a rented accommodation and your monthly rent payment exceeds Rs 50,000, then you need to pay tax (TDS) on behalf of your landlord. “For doing so, you need to deduct 5% of the annual rent payment as tax and submit it to the government. As this activity needs to be done only once a year at the end of the financial year or on termination of tenancy, you still have time till March 31, 2018 to complete it,” says Chandak.
After deducting the TDS, you need to submit it along with the PAN of your landlord in Form 26QC within 30 days from the month-end during which TDS has been deducted. Moreover, if you pay more than Rs 1,00,000 as annual rent, then it is mandatory now to report the PAN of your landlord for claiming the HRA exemption.
4. Book LTCG before March 31
If you are making long-term capital gains (LTCG) by selling the listed equity shares or equity mutual funds, then you should sell them before March 31 to claim tax exemption on them. If you are making loss on them, then you should sell them after this date to set off your loss against any LTCG you may make.
5. Getting Form 12B
Form 12B is a form which needs to be furnished by an individual who is joining a new company in the middle of the year. In other words, it is required only in the year in which you have two employers. “The main purpose of this form is to acquaint your new employer with the income earned by you from the previous employer for the purpose of correct TDS (Tax Deducted at Source) deduction. This form saves the employee from paying higher amount of taxes at the time of filing his return (ITR). Further, on submission of Form 12B by the employee, the new employer will be able to furnish a Consolidated Form 16 at the end of the year with the correct details. Therefore, it is recommended that every new employee must submit Form 12B to their new employer at the time of his joining,” says CA Abhishek Soni, Founder, tax2win.in.
However, if you have still not submitted your Form 12B to the current employer, then you should do this before March 31st to enable them to deduct the correct amount of TDS. This will also help you while filing your income tax return.
6. Make necessary investments
If you are a taxpayer and have taxable income, then it is in your own interest to make necessary investments in tax-saving investment avenues in a bid to save as much tax as possible. However, you need to remember that only investments made up to March 31, 2018, will be allowed for tax deduction for financial year 2017-18 as per the Income Tax Act. Any investment made after March 31st will not qualify for tax deduction for the current financial year while filing your income tax return. So, hurry up if you have still not done the required investments yet. However, don’t invest only to save taxes. Invest keeping your future life goals in mind. Only then you will be able to make the best use of your savings and investments.