Thing you need to do before 31 March 2024

As the financial year draws to a close on March 31, 2024, taxpayers have a limited window to optimize their tax-saving strategies for FY 2023-24. Here's a detailed guide on key steps individuals can take to maximize tax savings before the deadline:

Updated ITR Filing Deadline:

Taxpayers have until March 31, 2024, to file an updated income tax return for FY21 (AY 2021-22). This deadline offers a window for individuals who missed filing their returns for FY 2020-21 or need to rectify any errors in their previous filings. Use Income Tax Calculator to calculate the tax.

According to data from the Income Tax Department, thousands of taxpayers utilize this opportunity each year to rectify mistakes or omissions in their tax filings.

Invest in Tax-Saving Options:

Section 80C of the Income Tax Act offers taxpayers avenues for tax deductions. Consider allocating funds to tax-saving instruments such as the Employee Provident Fund (EPF), Public Provident Fund (PPF), and Equity Linked Savings Schemes (ELSS).

EPF allows individuals to contribute up to 12% of their basic salary monthly, providing tax benefits while building a retirement corpus.

PPF, a government-backed scheme, offers secure investment with attractive returns (approximately 8%) and partial liquidity after 7 years.

ELSS provides market-linked returns with a 3-year lock-in period, allowing investors to benefit from potential capital appreciation while saving taxes.

These investments collectively offer tax deductions of up to Rs 1.5 lakh under Section 80C, thereby reducing taxable income.

TDS Filing Certificate for Tax Deduction:

Taxpayers must issue TDS filing certificates for tax deductions made under various sections for January 2024. Specific deadlines apply to different sections:

TDS Certificate issuance for sections 194-IA, 194-IB, and 194 M: March 17 – January 2024.
Filing Challan Statement for Tax Deducted Under Section 194-IA, 194-IB, and 194M: March 30 – February 2024.

Data reveals that compliance with TDS certificate issuance deadlines helps streamline tax filing processes and ensures accurate reporting of income.

Unlock Tax Savings with Government Schemes:

Government schemes like the Senior Citizen Savings Scheme (SCSS), Sukanya Samriddhi Yojana (SSY), and National Pension System (NPS) offer avenues for tax-efficient savings.
SCSS is tailored for senior citizens, offering higher interest rates and tax benefits.

SSY is aimed at parents/guardians for the long-term financial security of girl children.
NPS provides retirement savings options with tax benefits under Section 80C and additional tax benefits under Section 80CCD(1B).

Minimum Investment Deadline:

Government savings schemes like PPF or SSY require minimum annual investments. Failure to meet this requirement may result in penalties. Taxpayers have until March 31, 2024, to fulfill the minimum investment criteria and avoid penalties.

Analysis shows that timely investments are crucial for maintaining the operational status of accounts and avoiding penalties imposed for non-compliance with minimum investment requirements.

Benefits of Owning an Electric Vehicle:

Taxpayers can avail deductions of up to Rs 1,50,000 for interest payments under Section 80EEB by owning electric vehicles.

The deduction applies to interest paid on vehicle loans sanctioned between April 1, 2019, and March 31, 2023.

Maximize Tax Savings with Health Insurance Deductions:

Health insurance premiums paid for self, spouse, dependent children, and parents qualify for tax deductions under Section 80D.

Individuals can claim deductions of up to Rs 25,000 for self and family, with an additional Rs 25,000 for parents (Rs 50,000 if parents are senior citizens).

This translates to potential tax savings of up to Rs 75,000 or Rs 100,000, depending on the age of the insured.

Boost Tax Savings Through Charitable Donations:

Voluntary contributions to eligible causes and organizations qualify for full tax exemption under Section 80G of the Income Tax Act.

Taxpayers can reduce taxable income while supporting charitable initiatives such as the Prime Minister’s Relief Fund or certified NGOs.

Pradhan Mantri Vaya Vandana Yojana for Senior Citizens:

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) offers senior citizens a steady income stream in exchange for a one-time investment.

Individuals aged 60 and above can benefit from an annual interest rate of 7.4% with a tenure of 10 years.

Fourth Installment of Advance Tax Payment:

Ensure timely payment of the fourth installment of advance tax by March 15, 2024, if applicable, to avoid penal interest.

FASTag KYC Deadline:

In response to issues faced by FASTag users, the NHAI extended the deadline for updating FASTag KYC details to March 31, 2024. FASTag users should ensure their KYC details are updated within this timeframe.

Reports suggest that the extended deadline has provided relief to millions of FASTag users, allowing them ample time to comply with KYC requirements and avoid disruptions in toll payments.

By strategically leveraging these tax-saving avenues and adhering to deadlines for financial tasks, taxpayers can optimize their tax savings and effectively manage their finances for FY 2023-24.