Tax compliance is one of the most important things that a person should look after. As per the Income Tax Authorities, every tax payer whose taxable income exceeds Rs. 2, 50, 000 in a financial year should pay taxes on the basis of the respective tax slab. However, there are certain areas where the department has offered a leverage to the tax payers. So, let’s take a look into come of the tax compliances which one must do before March 31.
#1 – Keep a track of your income
Irrespective of whether you are in a business or profession, you should always keep a track of your income. Though this does not mean that you should be accounting every single rupee that you own, but you should be have a rough idea of the income that you have generated in the past 12 months (April to March). Having a rough estimate of your income will allow you to diversify your income and reduce the tax liability.
#2 – Invest Wisely
Before March 31 arrives, place some of your income under investments. The IT-Department offers a sum of INR 1, 50, 000 as deduction under Section 80C if you invest in areas such as LIC, PPF, EPF, NSC, SCSS, etc. These investments should be made during the financial year only. Investments made after 31 march are allowed as deduction in next year. For example if you have paid Rs.10,000 as LIC premium on 10 march,2021 for 1 year then Rs.10,000 will be allowed as deduction in A.Y. 2022-23.
In case you are salaried person you also need to submit all the relevant documents to your employer such as tuition fee receipts, LIC premium receipts, investment in PPF etc.
However, the sum total of investment made under Section 80C would be offered as a deduction or INR 1, 50, 000, whichever is lower. Also in case of donation or charity under section 80G, there should be payment before 31 march.
#3 – Look after your health
Keeping a track of your health can also help you claim some deduction under Section 80D, 80DD and 80DDB. Paying health insurance premiums under Section 80D can help you save Rs. 50, 000 (Self and Parents) from your tax liability. If the health insurance premium is in respect of a Senior Citizen, then the amount of deduction will become Rs. 1,00, 000 (Self and Parents). Deduction of INR 5000 is available for Preventive health check-ups under section 80D.
Under Section 80DDB, taxpayers can claim INR 40, 000 as a deduction for treatment of a critical ailment.
|Status||Deduction under Section 80DDB (INR)|
|Ordinary||40, 000 (A.Y.2022-23)|
|Senior Citizen||1,00,000 (A.Y.2022-23)|
#4 – File your advance tax
Taxpayers are often required to pay advance tax if their tax liability is more than Rs.10,000. In case TDS is being deducted from your income but if it is not sufficient, then also you need to pay advance tax. The person opting for presumptive income also needs to pay the whole amount of their advance tax before March. The last date of payment of advance tax is 15 March but also if you pay the advance tax before 31 March, it is treated as advance tax. There is 1% interest per month if there is a delay in the payment of interest.
One should not be waiting for suggestions or guidance for paying taxes. Payment of taxes should be taken as a privilege and should be completed within the due period.
#5 – Claim the reimbursement
In case you are a salaried person then you are entitled to some reimbursement as per your salary structure such as telephone bills, leave travel, medical reimbursement and so on, then you need to submit the proofs to your employer in order to claim tax exemption. Otherwise, these all become taxable in hands of employees. If you are entitled to medical reimbursement of Rs.12,000, then you must have to submit medical bills to your employer to claim tax exemption. These could be only claimed through the employer not while submitting a return.
#5 – Consult your tax adviser
Your CA/lawyer/tax consultant is one of the best people to guide you on tax savings. Consult your CA/lawyer/tax consultant and let him help you claim some other deductions as well. Additionally, he can also fix up errors in computation, if any.
Make sure your Tax Compliance is ready to go right before March 31. Have questions? Put them in the comment section and we will help you to clear your doubts!