Here are the five crucial financial tasks you must complete before March 31

For most salaried people, March 31 means a rush to complete unfinished investments for tax saving. However, there are more things, other than such investments, that need to be done before the financial year comes to a close.

Here are 5 things you must do before this weekend:

Invest for tax saving

Financial planners say that you should ideally plan your investments from the beginning of the financial year. However, if you have still not made those investments, it is high time you do that. Do check what your investment requirement is under section 80C. Deduct your existing contribution to EPF, home loan principal repayment and life insurance premium paid, if any.

80C investments can be in various instruments such as tax saving mutual funds (ELSS), insurance plans and PPF.

Pravin Jadhav, Whole-Time Director, PayTM Money, advises linking investments to one’s goals. “If your goal is wealth creation, ELSS funds are ideal as these funds have low lock-in period and can generate high returns over medium term. However, if someone has retirement planning as the goal and wants lower volatility compared to equities, they may look at PPF as well,” Jadhav said.

If you do not have time to understand your financial goals and that cater to those goals, it may be better go for a tax-saving bank fixed deposit with 5-year tenure. Also before buying an insurance product, trying to know what you are buying since the premium commitment would be for many years.

Submit proofs for reimbursements

If you have reimbursements pending for expenses incurred on items such as telephone bills, cab bills etc, do it before the financial year-end. Also submit proof of rent receipts, tickets, to your employer for claiming HRA exemption and LTA exemption. “Reimbursements such as telephone bills, LTA cannot be claimed at the time of filing tax return, resulting in higher tax outgo,” says Archit Gupta, Founder & CEO ClearTax.

Complete pending Advance Tax formalities

The deadline for the payment of last installment of Advance Tax for FY 2018-19 was March 15. However, if you have missed it, paying it before the financial year end would save you from penalties. “Under Section 211 of the I-T Act, any amount paid as Advance Tax on or before March 31 will also be considered as Advance Tax paid. In that case, you will not be liable to pay interest for defaults in payment of advance tax under Section 234B,” Gupta points out.

File income tax return for AY 2018-2019

The deadline to file income tax returns for individuals for assessment year 2018-2019 for the income earned in financial year 2017-2018, was August 31, 2018. If you have missed this you can still file the return with a penalty of Rs 10,000. The penalty is capped at Rs 1,000 for individuals with total income less than Rs 5 lakh. The extended deadline for filing belated return with penalty expires on March 31, 2019. If you have not done it so far, go for it now and comply with the law.
 

“If you miss the last chance to file the returns for AY 2018-19 i.e. March 31, you will be an ‘Assessee in Default’ in the eyes of law. You won’t be able to e-file your income tax returns. If you have made transactions or there are details being reported in your Annual Information Report (AIR), you may receive an enquiry from the income tax department,” Gupta warns.

Raise pending invoice

In case you are a freelancer or have worked part time on some project, do not forget to raise invoices. There are many corporations who insist on raising invoices before the end of financial year. You may lose your claims if you do not abide by the deadline. Better to check if you are paid for all your work and if not raise invoices and follow it up. In the hurry to finish more assignments, there may be a possibility that you may have forgotten to collect your money.

-ENDS-

Things to complete before March 31:

• Make investment in tax-saving instruments
• Submit of proofs for reimbursements
• Finalise payment of advance tax due to avoid interest under Section 234B
• File pending Income Tax return for FY 2017-18

Consequences of not completing the steps:

• TDS deduction may be higher if tax-saving investment proofs are not shown though refund may be claimed at the time of filing tax return
• Penal Interest on non-payment of advance tax under section 234B
• Non-compliance with I-T returns filing may invite notices from the tax department.
• Reimbursements cannot be claimed while filing tax return, resulting in higher tax outgo