The month of March is almost over, signalling an end to financial year 2018-19. While the last three months of the financial year are all about tax planning, here are a few things that you must complete before March 31.
Do Not Forget To File Belated Tax Returns
The last date for filing returns in a financial year is July 31. But if you miss filing by this date, you still get an opportunity to file it by December 31 and March 31 of a financial year by paying the prescribed penalty. The last date to file returns for the financial year 2017-18 or assessment year 2018-19 is March 31, 2019. A fine of Rs. 5,000 under section 234F under the Income Tax Act has been introduced for individuals who fail to file their returns before August 31 (after the July 31 deadline was extended) and Rs. 10,000 for people to file their returns after December 31, 2018 and before March 31, 2019. The penalty has been limited to Rs. 1,000 for individuals whose taxable income does not exceed Rs. 5 lakh in a financial year. In case you miss the March 31 deadline as well, you may not get another chance to file your returns. Based on your tax liability, you may also come under the watchful eyes of the Income Tax Department, which may take appropriate action. The action may comprise of an imprisonment up to seven years or a penalty that up to 50 per cent of your income earned in a financial year as per the prescribed rule. Also, you may lose the chance to revise your ITR if you miss the March 31 deadline. Earlier, a taxpayer was allowed to revise his ITR up to two years from the end of the financial year for which the return was filed. Under the new and existing law, the revised ITR can be filed only within one year from the end of the financial year. This means you can file your revised ITR for the financial year 2017-2018 till March 31, 2019 only.
Get Your Tax Saving Plans Right
Tax planning is important as it reduces your tax liability and helps you save money to achieve varied life goals. It is, therefore, wise to set things right before the financial year ends. Beginning early gives you enough time to have a healthy mix of both debt and market linked investment instruments. However, if you are late in completing your investment tasks, you have only three more working days to complete them. If you want to invest in instruments with guaranteed returns, go for PPF, NSC or the five-year fixed deposit. If you would like to make an equity-linked investment, go for ELSS. Also, submit the investment proof documents to your employer at the earliest.
Submit The Necessary Forms
If you have switched jobs in the financial year 2018-19, ensure that you submit form 12B to your new employer. Form 12B is the document that has all the necessary details about your income and tax deducted by your previous employer based on the tax saving declarations made by you. Besides this, if you have earned interest over Rs. 10,000 in a financial year, you would be require to submit Form 15G or Form 15H to the bank so that no TDS is deducted from your taxable income.
Don’t Miss To Book Profits Via LTCG in MFs
Last year’s budget made long-term capital gains for equity investments taxable where the gains are over Rs. 1 lakh in a year. This simply means that LTCG up to Rs. 1 lakh is tax-free. So, if you have earned long-term capital gains, you can make a tax-free profit booking of up to Rs. 1 lakh before March 31. Lastly, you can also book capital losses for the year in this manner by March 31. The losses will be adjusted against your gains to reduce your taxable income.
The writer is CEO, BankBazaar.com