Income tax returns (ITR) filing: As March 31 deadline looms, have you fixed these financial matters

Income tax returns (ITR) filing: We are just one days away for the end of financial year 2017-18, where every business will close their audit report for the year, highlight about their earnings and business operations. However, they are not the only one who have responsibility in hand, we as individual also have few task related to your finances that needs to be taken care before March 31, in order to avoid last minute error. While most of us are busy achieving year-end targets at work, one needs to remember that it is equally important to take stock of your personal finance and settle a list of pending matters.

Here’s a list of financial matters that needs to be taken care before March 31.

Filing of Income Tax Return (ITR)

Income Tax Department on it's portal has been warning taxpayers by saying, “Please avoid last minute rush and file your Income Tax Return for the assessment year 2016-17 and 2017-18 well before March 31, 2018.” The department has also cautioned taxpayers in regards to Phishing mail alerts, saying, “IT department never asks PIN, OTP, Password or similar access information for credit cards, banks or other financial account related information through e-mail or phone calls . Taxpayers are cautioned NOT to respond to such e-mails or phone calls and NOT to share personal or financial information.”

However, history repeats itself, and usually when there is last minute rush on IT department portal, you may end up with incomplete ITR filings, which also turns out to be even more frustrating.

Not paying your taxes on time can cause many issues; and you may even end up paying penalties for late filing. If you have missed your ITR for previous years, then try to finish it this week itself, or else you could attract penalty of 1% per month and a penalty of Rs. 5000 in special cases.

Tax savings investments

If you are under Rs 2,50,000 income, then you will be taxed on your earnings, however there are bunch tax deductions that you can claim on your investments. Here’s a list of tax deduction schemes, as per IT department. 

Section 80C - Under this section, any individual or a Hindu Undivided Family (HUF) can claim deductions up to Rs 1,50,000 for FY19.

These instruments include Employee Provident Fund (EPF), Public Provident Fund (PPF), National Savings Certificate (NSC), payment towards children’s tuition fees, ELSS, National Pension System (NPS), Life Insurance policy premiums, deposits in the Sukanya Samriddhi Yojana, etc.

Section 80CCD - An individual can claim deduction under this section for contribution to pension account. They are:

Employees contribution: If an individual has made deposits in his/her pension account, then maximum deduction is 10% of salary (in case of an employee) or 10% of gross total income (in case of self-employed) or Rs 1,50,000 whichever is less.

Section 80DDB - Deduction under this one is available for rehabilitation of handicapped dependent relative.

Section 80TTA - Under IT Act, Section 80TTA is titled as ‘Deduction in respect of interest on deposits in savings account’. You can claim exemption on up to Rs 10,000 received as interest on your savings account deposits.

Section 80GG - Such section is applicable for rent paid during the time when House Rent Allowance is not received. Also, the taxpayer, spouse or minor child should not own residential accommodation at the place of employment.

Section 80G - Under IT Act, Section 80G is available for contributions made to certain relief funds and charitable institutions.

Section 80E - An eligible person can get tax benefits under section 80 (E) of the IT Act if you have taken a loan for higher studies for self, spouse, children or your legal ward.

Thus, there are only four working days for banks in the last seven days before Marchends, so to avoid delay, avail your tax benefit soon. 

Health Check-Up

The government has proposed to increase the tax deduction benefit to Rs 50,000 for senior citizens for a cover of Rs 10 lakh. But did you know one can avail additional tax benefit upto Rs 5,000 under section 80D of IT act for preventive check-ups. 

Furthermore, there are many health insurance companies who  allow reimbursement for the amount spent on preventive health check-ups as per their policy scheme. However, it is always best to check the policy of companies, as the reimbursement amount for a preventive health check-up may vary from company to company, and only that amount will be eligible for exemption.

File Form 15G and Form 15H

A taxpayer can submit Form 15G and Form 15H to make sure TDS is not deducted on your income. Some banks allow these forms to be submitted online through the bank’s website.

These two forms are valid for one financial year, thus it becomes very important to submit them every year if you are eligible. Submitting them as soon as the financial year starts will ensure the bank does not deduct any TDS on your interest income.

In case, if hold a fixed deposit or deposits and their interest income is more than Rs 10,000 for a financial year, then your  bank will deduct TDS from such interest income.

Here’s a list of condition that makes you eligible to submit these forms, as per ClearTax. 

Form 15G

• You are an individual or HUF
• You must be a Resident Indian
• You should be less than 60 years old
• Tax calculated on your Total Income is nil
• The total interest income for the year is less than the minimum exemption limit of that year, which is Rs 2,50,000 for financial year 2016-17

Form 15H

• You are an individual
• You must be a Resident Indian
• You are 60 years old or will be 60 years old during the year for which you are submitting the form
• Tax calculated on your Total Income is nil

Retrieve Equity Investment for avoiding LTCG

If you are an equity investor, then you can earn tax-free returns by selling your long term stocks before March 31, as post Budget FY19 announcement, it is known that  Long-term capital gain (LTCG) from equity-oriented investment booked after March 31would be subject to LTCG tax at 10% rate.

Thus, if you sell your equity investment after March 31, then 10% LTCG will be levied on your gains above Rs 100,000. 

So to avoid error and extra loss of money, make sure that you complete these financial matter before the current fiscal year end.