Today we will discuss the Ten Things to do before 31st March 2024 India for Tax Saving and Compliance. This is applicable for both Individuals and Businesses.
Table of Contents
- Make investments to save tax
- Calculate & Pay Advance Tax
- Purchase Of Fixed Assets For Business or Profession
- Link your PAN with Aadhar
- Calculate Your Capital Gains
- Prepay your Loan
- Calculate GST turnover
- Submit Form 12B to your employer
- File TDS on Crypto P2P Transactions done on International Exchanges
- File Updated ITR for FY 2019-20
Make investments to save tax
Investing in order to save on taxes is always a wise decision. There are various types of investments that can help you save taxes under different sections of the Income Tax Act. Some of these investments are:
- Section 80C investments: Under this section, investments of up to Rs. 1.5 lakhs per annum in certain instruments are eligible for tax deduction. Some popular investment options under Section 80C are:
- Public Provident Fund (PPF)
- Equity Linked Saving Scheme (ELSS)
- National Pension System (NPS)
- Tax-saving fixed deposits (FDs)
- Senior Citizen Savings Scheme (SCSS)
- Sukanya Samriddhi Yojana (SSY)
Section 80D investments: Under this section, investments in health insurance premiums of up to Rs. 25,000 for self and family and Rs. 50,000 for senior citizens are eligible for tax deduction.
Section 80E investments: Under this section, investments in education loans are eligible for tax deduction. The entire interest paid on an education loan is deductible from taxable income.
Section 80TTA investments: Under this section, investments in savings accounts are eligible for tax deduction. Interest earned on savings accounts up to Rs. 10,000 per annum is deductible from taxable income.
Section 80G investments: Under this section, investments in certain charitable organizations are eligible for tax deduction.
It is important to note that the tax-saving investments may have certain conditions and lock-in periods associated with them. It is advisable to consult with a CA to determine the most suitable tax-saving investments for your financial goals and circumstances.
Calculate & Pay Advance Tax
It is important to calculate and pay advance tax before 31 March to avoid interest on tax payments. The principle of "Pay As You Earn" is followed for income tax. However, 50% of salaried earners with earnings greater than 10 lakhs and 25% of small business owners often fail to do so, leading to payment of interest at the time of filing Income Tax Return.
Purchase Of Fixed Assets For Business or Profession
Buying fixed assets for business or profession is highly beneficial for claiming depreciation (50% of the specified rate of depreciation) once the asset is put to use. This results in a big reduction of profits and thereby reducing tax outflow.
Link your PAN with Aadhar
Linking your PAN with Aadhaar is mandatory as per the Indian Income Tax Department's rules. Failure to link PAN with Aadhaar can lead to the following consequences:
Inability to file Income Tax Returns: If you do not link your PAN with Aadhaar, you may not be able to file your Income Tax Returns (ITR). This can result in a interest, penalty, late fees and even legal action.
Invalid PAN: If you fail to link your PAN with Aadhaar, your PAN may become invalid. This can cause problems when you need to use your PAN for various financial transactions.
Inability to carry out financial transactions: If your PAN becomes invalid, you may not be able to carry out financial transactions such as opening a bank account, applying for a loan, or buying/selling property.
Calculate Your Capital Gains
The calculation of capital gains is an important aspect of income tax planning, especially for those who have sold capital assets such as stocks, mutual funds, property, or gold during the financial year.
Here are some reasons why you should calculate your capital gains before 31st March in India:
Tax Planning: Calculating your capital gains before 31st March can help you plan your tax liabilities better. If you have incurred capital losses during the financial year, you can offset them against your capital gains and reduce your tax liability.
Filing Tax Returns: If you have sold any capital assets during the financial year, you are required to report the capital gains or losses in your income tax returns. Calculating your capital gains before 31st March can help you file your tax returns on time.
- Record Keeping: Calculating your capital gains before 31st March can help you maintain accurate records of your capital gains and losses. This can be useful for future reference and tax planning.
On capital assets, especially shares, Mutual funds, etc, which if sold before 31 Mar will lead to Rs 1 Lakh exemption on LTCG and set off against profits will result if there is a capital loss.
Prepay your Loan
Check if you have surplus in Bank Account then its always good to pre-pay your loan considering rates are very High. Wealth Annual review should be done each March for your entire family.
Calculate GST turnover
Businesses or professionals should keep track of their turnover. The total turnover up to 31st March is to be calculated for the purpose of determining the applicability of GST Registration and payment
Submit Form 12B to your employer
If you have changed jobs during the financial year, then it is important to submit form 12B to your current employer. Form 12B is a statement that provides details of an individual's income earned from different employers during the same financial year. It is typically used when an individual switches jobs within the same financial year.
When an individual joins a new employer, they are required to provide details of their salary and tax deductions for the financial year up to the date of joining the new employer. The new employer uses this information to calculate the employee's tax liability for the rest of the year.
Form 12B includes details such as the employee's name, PAN number, previous employer details, income earned, tax deducted at source (TDS), and other relevant information. It is an important document for both the employer and the employee, as it helps ensure that the correct amount of tax is deducted at source and that the employee's tax liability is accurately calculated.
Form 12B needs to be submitted to the new employer within a certain period of time after joining. If an employee fails to submit Form 12B, their tax liability may not be accurately calculated.
File TDS on Crypto P2P Transactions done on International Exchanges
The Indian Government has introduced a new provision called Section 194S under Budget 2022, which mandates the deduction of TDS at a rate of 1% on the transfer of cryptocurrency and other Virtual Digital Assets (VDAs) if the aggregate value exceeds INR 10,000 during the financial year. This provision is effective from 1st July 2022 and not 1st April 2022.
Additionally, according to the new tax laws proposed in BUDGET 2024, one may attract a penalty under Section 271C of the Income Tax Act if trying to avoid TDS by using offshore or non-compliant platforms. Failure to pay TDS on crypto transactions can land one in jail for up to seven years, as per Clause 119 of Finance Bill, 2024 on Page 91.
With introduction of Crypto TDS penalty in Budget 2024, all crypto traders need to take the TDS deductions and its timely payments very seriously. This includes those who are trading on international crypto exchanges and P2P platforms (such as Binance P2P) otherwise it can lead to hefty interest & penalty and maybe even JAIL sentence.
File Updated ITR for FY 2020-21
Updated ITR Filing - It is necessary to submit the updated income-tax return for FY 2020-2021 or AY 2021-22 by 31st March 2024, as it cannot be filed by taxpayers after the deadline has passed.
So these are the 10 things that you should do before current financial year ends on 31st March 2024
|Ten Things to do before 31st March 2024
|Make investments to save tax
|Calculate & Pay Advance Tax
|Purchase Of Fixed Assets For Business or Profession
|Link your PAN with Aadhar
|Calculate Your Capital Gains
|Prepay your Loan
|Calculate GST turnover
|Submit Form 12B to your employer
|File TDS on Crypto P2P Transactions done on International Exchanges
|File Updated ITR for FY 2020-21