As the current financial year ends on March 31, 2024, many taxpayers are already planning their investments for the next year. However, it’s also important to focus on the closing year, FY 2023-24. By taking some simple steps now, you can save on taxes before the deadline arrives.

Here’s what to keep in mind to make the most of these tax-saving opportunities:

1. Invest in tax saving options

To leverage tax deductions under Section 80C of the Income Tax Act, consider options like the Employee Provident Fund (EPF) for salaried individuals, where 12% of the basic salary is invested monthly; the Public Provident Fund (PPF), a secure, 15-year government scheme with partial liquidity after 7 years and approximately 8% returns; and Equity Linked Savings Schemes (ELSS), offering market-linked returns with a 3-year lock-in period. These avenues not only facilitate tax savings up to Rs 1.5 lakh but also ensure your investments grow over time.

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2. Unlock Tax Savings with Government Schemes

Optimize your returns and avail tax benefits through government schemes. Section 80C of the Income Tax Act allows a deduction of up to Rs 1.5 lakh from your total annual income. One can explore these options for tax exemptions:

Senior Citizen Savings Scheme (SCSS)

Sukanya Samriddhi Yojana (SSY)

National Pension System (NPS)

3. Benefits of owning an electric vehicle

A deduction of up to Rs 1,50,000 for interest payments is available under Section 80EEB. “Whether an individual taxpayer possesses an electric vehicle for personal or business use, this deduction allows for the claiming of interest paid on the vehicle loan subject to the loan must be sanctioned between April 1, 2019, and March 31, 2023, to be eligible for the deduction,” says Prateek Mehta, Chief Business Officer, Angel One.

4. Maximize Your Tax Savings with Health Insurance Deductions

Taxpayers have the opportunity to significantly reduce their taxable income by claiming deductions on health insurance premiums. If you pay health insurance for yourself, your spouse, and your dependent children, you can claim a deduction of up to Rs 25,000. Furthermore, if you also pay for your parents’ health insurance, you’re eligible for an additional deduction of the same amount, Rs 25,000. “For senior citizens, this deduction is even more generous. Both for insuring yourself if you’re a senior, and for senior citizen parents, the deduction limit increases to Rs 50,000. This means potential tax savings on health insurance premiums could reach up to Rs 75,000 or Rs 100,000, depending on the age of the insured,” informs Mehta.

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5. Boost Your Tax Savings Through Charitable Donations

Enhance your tax-saving strategy by making voluntary contributions to various causes and organizations. Whether you donate to the Prime Minister’s Relief Fund, initiatives for controlling drug abuse, the Clean Ganges Fund, or to certified NGOs, your generosity not only supports valuable causes but also offers you tax benefits. Donations made to these entities are eligible for full tax exemption under Section 80G of the Income Tax Act, allowing you to reduce your taxable income while contributing to societal welfare.

6. Pradhan Mantri Vaya Vandana Yojana for senior citizens

The Pradhan Mantri Vaya Vandana Yojana is open for enrollment until March 31, 2024. This initiative provides senior citizens with a steady income in exchange for a one-time investment. Individuals aged 60 and above are eligible for this scheme, offering a current annual interest rate of 7.4%. The PMVVY has a tenure of 10 years.

7. Fourth installment of advance tax payment: March 15

If your net income tax liability in a financial year exceeds Rs 10,000, you must pay advance tax—calculated as estimated tax liability minus TDS. “The Income Tax Act, 1961, mandates four quarterly payments to avoid penal interest. However, not all individuals with net income liability above Rs 10,000 are obligated to pay advance tax due to certain exemptions. For the current FY 2023-24 (AY 2024-25), the fourth installment of advance tax paymentisdue on March 15,” says Mehta.