New Delhi: Tax Saving: The fiscal is going to end on March 31 and this is the time when you are supposed to do some financial tasks to avoid the loss or in other words to save money. For instance — if you are planning any investment to claim a rebate in the income tax then this is the right time. Moreover, you have only five business days to save your hard-earned money. So, we are going to tell you seven important works that may help you to avail financial benefits.
1. Investment to get income tax rebate
If you are planning to make any investment to take the advantage of income tax exemption, then you will have to invest by March 31. Many sections of the Income Tax Act like 80C and 80D are made to get the benefit of tax exemption on investments. Under Section 80C of the tax Act, tax exemption is often taken on investments up to Rs 1.5 lakh.
2. More interest will be given on FD by March 31
SBI, HDFC, Bank of Baroda and ICICI Bank are running special fixed deposit schemes for senior citizens. Under these schemes, senior citizens are becoming more interest than normal FDs. So, if you fall under this category or planning an investment for your parents, then do it by March 31 to avail of this benefit.
3. File late and revised returns
The last date for filing late or revised Income Tax Return (ITR) for 2019-20 is also March 31. A belated return is filed after the original deadline for filing returns for a financial year has been exhausted. For this, the taxpayer has to pay a penalty of Rs 10,000.
On the other, if you have made any mistake while filing the original return then you can file the revised return. The belated ITR is filed under section 139 (4) of the Income Tax Act, 1961. At an equivalent time, Revised ITR is filed under section 139 (5). The belated return is to be submitted before March 31, 2021, with a late filing fee of Rs 10,000.
4. Advantage of LTC Cash Voucher Scheme
Due to Corona, people couldn’t travel within the current fiscal year 2020-21. Therefore, the govt had announced the Special Leave Travel Concession (LTC) Cash Voucher Scheme. Under this, people can also avail of LTC by purchasing any goods or service from October 12, 2020, to March 31, 2021. The condition was that at least 12 per cent GST was paid on the goods and payment was made digitally. The per capita LTC fare is Rs 36,000. But to require it, the worker will need to spend 3 times the money.
5. Ensure minimum balance in PPF and NPS accounts
If you’ve got a Public Provident Fund (PPF) or National Pension Scheme (NPS) account but haven’t been ready to put money in it this fiscal year, then you want to put some amount in it to stay the account active. In case of not having a minimum balance in these accounts, they automatically become inactive. If you do not deposit the minimum required amount, then you will have to pay a fine to get them active again.
6. Book Profits from Stocks and Equity Funds
Long-term capital gains of more than Rs 1 lakh are now taxed on stocks and equity-oriented funds. If you have a long-term capital gain, then this is your chance to avail of tax exemption on long-term capital gains up to Rs 1 lakh. Before March 31, book the profit in such how that you simply get the advantage of tax exemption. For this, you should sell as many stocks and equity funds before March 31, on which you get a profit of up to Rs 1 lakh. Then invest equivalent money again within the next fiscal year.
However, in the process of selling and buying, you will have to pay 1 per cent of the brokerage house. Mutual fund investors won’t need to pay this amount because the entry loads aren’t charged and therefore the entry loads aren’t applicable when the funds are sold after one year.
7. Submit Form 12B
If you’ve got changed job after April 1, 2020, then inform the new TDS deducted within the earlier job through Form 12B to the new company. If you do not submit Form 12B by March 31, then the company can deduct more TDS, which you will lose.