Do this before 31st March and save your taxes

Tax Planning is important for every taxpayer and the same needs to be done before the end of the financial year to which income pertains. In addition to tax planning, taxpayer needs to collect relevant supporting documents/evidence and calculate his tax dues and pay the same in advance, if advance tax is applicable. Here we have listed few common things every individual taxpayer  needs to keep in mind before the end of financial year i.e. on or before 31st March:

1. Calculate your estimated income & tax liability to check if you are liable to pay advance tax and to assess which scheme of taxation is beneficial to you viz. New Tax Scheme or Old Tax Scheme. Please note, many of the below mentioned deductions will not be available if you opt for new tax scheme. Hence we suggest you to consult a Chartered Accountant who is expert and well experienced at tax planning who would help you collating your income, exemptions, deductions, TDS details for estimating your tax liability more accurately.
   
   
2. Gather your receipts for claiming deductions upto Rs. 1,50,000/- under Section 80C which may include following investments :
   
   
• Tax Saver Mutual Funds i.e. ELSS - Equity Linked Saving Scheme
• Life Insurance Premiums
• ULIP - Unit Linked Insurance Plans
• EPF - Employee Provident Fund {Employee's Share}
• PPF - Public Provident Fund 
• NSC - National Savings Certificates
• Tax Saver Fixed Deposits (FD) {Note: Interest on Tax Saver FDs is taxable}
• NPS - National Pension Scheme 
• SSY - Sukanya Samriddhi Yojana
• Tuition Fees Receipts of Children 
• Principal Component of Home Loan
  
  
3. If you are claiming deduction for house rent allowance, then ensure that you have submitted the necessary details and proofs like rent receipt, landlord PAN, rent agreement, etc, to your employer for claiming HRA benefit. If the Annual Rent paid exceeds Rs. 1,00,000/- you are also required to submit your landlord PAN to your employer. In case the landlord does not have a PAN, a declaration to this effect from the landlord should be taken by the taxpayer for his records.
   
   
4. If you have taken a home loan, you must obtain an Interest-Principal bifurcation Statement cum Certificate from the bank/financial institution for the relevant financial year. Interest on Home Loan of a Self Occupied Property is deductible upto Rs. 2,00,000/- under section 24(b) of Income Tax Act. 
   
   
5. If you have made a donation to a specified charitable organization during the year, then ensure that you possess a valid receipt to claim deduction u/s 80G.
   
   
6. Obtain a receipt of Mediclaim / Health Insurance Premium paid under Section 80D on insurance policies of Self or Family(Spouse & Dependent Children) or Parents. 
   
   
7. Statement of Interest on Educational Loan under section 80E.
   
   
8. Sold / Transferred any assets like Land / House Property - You need to consult your Chartered Accountant in advance to invest your sale proceeds in appropriate manner to save/minimize on your capital gains tax liability. Appropriate distinction needs to be made between long term and short term capital gains which attracts different tax rates.
   
   
9. Sold / Transferred Equity Shares, Bonds or Mutual Funds : You need to obtain capital gains statements from your broker/agent and consult your Chartered Accountant before year end to save/minimize your capital gains tax. Appropriate distinction needs to be made between long term and short term capital gains which attracts different tax rates.
   
   
10. Include Income of Minor Child if the same is to get clubbed with your income while calculating your taxable Income.
    
    
11. If you are claiming medical reimbursement from your employer then you must keep your medical bills ready for submission to your employer.
    
    
12. Deduction under section 80U for Disabled Persons : You needs to obtain a certificate from medical authority constituted by either the Central or the State Government.
    
    
13. If you are claiming Deduction u/s. 80DD for expenses on medical treatment of disabled dependent then you must ensure that you have a medical certificate of disability of disabled dependent.
    
    
14. In case you have changed/switched your employer during the financial year and not collected your Form 16 from old employer, then you should collect the same ASAP. We have observed with many of our salaried clients, the new employer does not consider income from previous employer while deducting employee's TDS and later the employee has to pay huge tax on last date of filing due to this mistake.
    
    
15. Collect all your bank statements and Tax Deducted at Source (TDS) certificates, if any, from your bank. Banks generally deduct 10% TDS on Interest Incomes, however if you are falling in 20% or 30% tax bracket, you will be liable to pay additional tax on your interest incomes. Hence you should consider impact of additional tax (in excess of TDS deducted by bank) on interest received on bank deposits. 
    
    
16. In case your annual tax liability exceeds Rs. 10,000/- you are liable to pay advance tax i.e. you need to pay 100% of your tax liability before 31st March. In case you default on paying advance tax, you will be liable to pay interest on your tax liability.

These are few of the important steps that one should take care of while preparing one’s tax computation.