Ensure you have taken these steps before March-end for tax benefits

Make sure you have taken all these steps to ensure maximum benefits
With March-end approaching fast, both salaried and business persons need to ensure they have made all the right investments, bought insurance and filed claims to get maximum tax benefits. Some of these steps include:


Capital gains planning: If you have been dabbling in the stock markets, and have booked capital gains or losses on some of your investments – both short term and long term – do quantify them and ascertain your tax liability. You can reduce your tax burden if you can set off your capital losses against capital gains. And if you have a capital loss from earlier years, you could offset them as well.

If you have some laggards in your portfolio, then this is the right time to book your losses and reduce your tax burden. “This move is called tax-loss harvesting. Several taxpayers employ this strategy to reduce their tax liability, especially due the to 10 per cent long-term capital gains tax on capital gains on equities beyond Rs 1 lakh. Equity shares may be sold at the end of one financial year and purchased again immediately at the start of the next financial year. This helps reduce tax outgo in a particular financial year, without impacting holdings or overall investment strategy. Also, a relook is needed for stocks in the portfolio which pay good dividends since the incidence will be on the investor from next year,” Archit Gupta, CEO and founder, Cleartax.

Payment of advance tax:  If you are in the slab that attracts advance tax, calculate your liability. The last instalment of advance tax is due on March 15. For delayed payment of advance tax, there is a provision of penal interest. “Any taxpayer whose total tax liability exceeds Rs 10,000 must pay advance tax,” says Gupta.


Mandatory investments in NPS, PPF or SSY: Your existing investments or housing loan repayment may have taken care of your Section 80C investment requirement. However, if you have started investing in specific schemes with mandatory investment limits, complete it. For example, National Pension Scheme mandates a minimum investment of Rs 1,000, Public Provident Fund prescribes minimum investment of Rs 500, and Sukanya Samriddhi Yojana prescribes a minimum investment of Rs 250. Deposit this before March 31, otherwise penal provisions will kick in. “This is the government’s effort to ensure that people who use these schemes for savings and tax-savings benefit from them. Dormant accounts are gradually closed,” says Harsh Jain, COO and Co-founder, Groww.


File for all reimbursements: If you are an employee and have incurred some expenditure for which you are eligible for refunds, do it now. Apply at the earliest. It will give you time if there is a mistake in your reimbursement applications. Leave travel application and other reimbursements, if not applied for, are paid to you after deducting the taxes applicable.


Belated return for the AY2019-2020 (the financial year 2018-2019): This is the last chance to file income tax returns for a previous financial year without a fine. Belated income tax return for the previous financial year can be done by March-end. There will be a late fee of Rs 10,000 for ITR filed after December 31, 2019, up to till March 31, 2020. However, there will be terms and conditions attached to this. Consult your tax advisor to make the most of the last month of the financial year.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel