Important Financial Tasks To Complete Before March 31st

In India, we follow a financial year where the year starts on the 1st of April and ends on the 31st of March. As the name suggests, this is tied in with various financial reporting and accounting purposes. Therefore, as an individual residing in India, what are certain tasks that have to be completed by the end of March?

Tax Saving Payments

The cut-off date for making any tax-saving investments that can be availed as deductions under under the old regime is 31st March.

• Section 80C: up to 1.5 lakh can be invested and claimed as a deduction with an additional Rs 50,000 under Section 80CCD(1B) on investment in NPS. Some of the investments that can be made are-

1. Investment in ELSS(Equity Linked Saving Schemes) Mutual Funds
2. Payments made towards Life Insurance Premiums including payments made to ULIPs
3. The principal portion of any home loans taken and repaid
4. EPF/PPF/RPF investments
5. Payments made to Sukanya Smriddhi Yojana, National Savings Certificate
6. 5-year FDs

• Section 80D: A deduction of Rs 25,000 is available on payment of Medical Insurance for Self, Spouse and any dependent Children. If the individual is aged above 60 then the deduction is Rs 50,000. An additional Rs 25,000 is available for Medical Insurance Payments made for Parents. If the parents are above 60 years of age then Rs 50,000 is the additional deduction available.
• Section 80G: Deduction for Charitable Contributions made. Contributions are to be made by the end of the year and as per the Income Tax Act.
• Section 24: A Deduction of the Payment of Municipal Taxes during the financial year is available under House Property Income. Therefore the last day to make payments for Municipal tax is 31st March.

Advance Tax Payment

Any taxpayer having a liability of over Rs 10,000 is required to pay Advance Tax. Advance tax is to be paid in 4 instalments, with the last one being to deposit 100% of advance tax by 15th March 2024. If this date has been missed, it is recommended to pay before 31st March 2024. This ensures that the interest charged on failure or delay in advance tax payment is minimal.

Form 12BB

The last date to submit Form 12BB by the employee to the employer is 31st March. Employers might have an earlier deadline so please be informed. This form is a declaration by the employee about income earned from multiple sources and investments made for tax deductions. The TDS rate shall be adjusted by the employer accordingly. This ensures accuracy in tax payments and reduces the risk of interest being charged when filing the ITR.

Updated Return Section 139(8A)

An Updated Return can be filed within 2 years from the end of the relevant assessment year. It can be filed in case of updation of any omissions or errors. It can also be filed if the return was not filed in the first place.

• 31st March 2024 marks the last day to file an Updated Return for AY 21-22(FY 20-21).
• It is important to note that there is an additional tax payable on filing of Updated Return. 25% of the tax amount if filed within 12 months of the end of the relevant assessment year and 50% if within 24 months. Therefore, if a taxpayer wants to avoid paying 50% and instead pay 25%, it is recommended to file the Updated Return for AY 22-23(FY 21-22) by 31st March 2024.

Capital Gains

• Section 54EC: Any person planning to claim exemption on Capital Gains should ensure that they complete their investment in the bonds under Section 54EC within 6 months from the date of transfer. Therefore any sales made before October 2023, must complete this investment by the end of March 2024.
• Section 194IA: TDS on a property purchase to be done by the Buyer at the rate of 1% if the sale value is Rs 50 lakh or above at the time of payment. TDS is to 1% on the entire amount if the threshold is crossed. This TDS is to be deposited with the government using the income tax website within 30 days from the date of deduction. Therefore, all the buyers of land or buildings paying Rs 50 lakh or above in January and February are to complete the filing of Form 26QB by March 2024.

It is best to heed the above tax compliances and make the necessary payments and investments by the end of March.