Things you need to do before 31 March 2024

The end of March signifies the close of the financial year in India. This often-overlooked deadline can hold a surprising amount of importance, especially when it comes to your finances. Whether you’re aiming to maximize tax savings, organize important paperwork, or simply ensure you’re on track for your financial goals, taking action before March 31st can make a big difference.

To take advantage of these tax-saving options, bear the following in mind:

1. Invest in tax-saving avenues
   

   Consider exploring tax-saving options to maximize deductions under Section 80C of the Income Tax Act. These options include investing in the Employee Provident Fund (EPF), where a portion of your monthly salary (12% of the basic salary) is allocated; the Public Provident Fund (PPF), a secure government scheme offering approximately 8% returns over a 15-year period, with partial liquidity available after 7 years; and Equity Linked Savings Schemes (ELSS), which offer market-linked returns and require a 3-year lock-in period. These avenues not only help in saving taxes up to Rs 1.5 lakh but also enable your investments to grow steadily over time.

2. Government schemes for tax saving
   

   To unlock tax savings and maximize returns, it’s wise to explore government schemes available under Section 80C of the Income Tax Act. This section allows for deductions of up to Rs 1.5 lakh from your annual income. By considering initiatives like the Senior Citizen Savings Scheme (SCSS), Sukanya Samriddhi Yojana (SSY), and the National Pension System (NPS), individuals can not only optimize their returns but also avail tax exemptions. These schemes offer avenues for strategic financial planning, ensuring both long-term security and immediate tax benefits.

3. Consider owning an electric vehicle
   

   Owning an electric vehicle comes with its perks, one being a potential deduction of up to Rs 1,50,000 for interest payments, as outlined in Section 80EEB. This deduction allows individuals, whether for personal or business use, to claim the interest paid on the vehicle loan. However, it’s important to note that the loan must have been sanctioned between April 1, 2019, and March 31, 2023, to qualify for this deduction.

4. Tax saving through Health Insurance
   

   Taxpayers can significantly lower their taxable income by claiming deductions on health insurance premiums. If you cover health insurance for yourself, your spouse, and your dependent children, you can claim a deduction of up to Rs 25,000. Additionally, if you also pay for your parent’s health insurance, you qualify for an extra deduction of Rs 25,000.
   For senior citizens, the deductions are more substantial. Both for insuring yourself as a senior and for senior citizen parents, the deduction limit increases to Rs 50,000 each. This implies potential tax savings on health insurance premiums of up to Rs 75,000 or Rs 100,000, depending on the age of the insured.

5. Tax Savings Through Charitable Donation
   

   Optimize your tax-saving approach by considering voluntary contributions to diverse causes and organizations. Whether you support the Prime Minister’s Relief Fund, initiatives combating drug abuse, the Clean Ganges Fund, or certified NGOs, your philanthropy not only aids critical causes but also provides tax advantages. Donations to these entities qualify for complete tax exemption under Section 80G of the Income Tax Act, enabling you to lower your taxable income while promoting societal welfare.

6. Pradhan Mantri Vaya Vandana Yojana for senior citizens
   

   Until March 31, 2024, enrolment remains open for the Pradhan Mantri Vaya Vandana Yojana. This program offers senior citizens a consistent income in return for a single investment. Eligible individuals, aged 60 and above, can participate in this scheme, which currently offers an annual interest rate of 7.4%. With a tenure of 10 years, PMVVY aims to support the financial stability of elderly citizens.

7. Update your vehicle’s FASTag KYC
   

   The NHAI has extended the deadline until March 31, 2024, for FASTag users to update their KYC details, offering much-needed relief to millions and ensuring uninterrupted toll payments. This extension provides ample time for compliance, easing the burden on users. By leveraging these tax-saving avenues and meeting financial deadlines, taxpayers can optimize their savings and effectively manage their finances for the fiscal year 2023-24.

8. Fourth installment of advance tax payment: March 15
   

   If your total income tax obligation for a fiscal year surpasses Rs 10,000, you’re required to settle advance tax, determined as the estimated tax due minus any TDS. The Income Tax Act of 1961 stipulates four quarterly payments to evade penal interest. Nonetheless, certain exemptions may relieve individuals from the obligation to pay advance tax despite having a net income liability exceeding Rs 10,000. For the ongoing fiscal year 2023-24 (Assessment Year 2024-25), the fourth installment of advance tax payment is scheduled for March 15th.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.