Five Important Income Tax Related Tasks you Need to Complete on or before 31 March 2024
As we approach the end of the current financial year, it’s crucial for taxpayers to complete all income tax-related tasks before March 31 to avoid penalties or complications. Let’s delve into the key tasks that demand your attention before this important deadline.
Investing in Tax Saving Schemes:
Investing in tax-saving schemes is a crucial aspect of tax planning and investment strategies for taxpayers in India. With March 31 as the deadline, under the old taxation regime, individuals should aim to make their investments eligible for deductions as per Section 80C of the Income-Tax Act, 1961.
This deadline prompts individuals to explore various options, such as contributing to Public Provident Funds (PPF) and investing in tax-saving fixed deposits. These schemes offer attractive tax benefits, compelling taxpayers to optimize their investments before the cut-off date.
Maximizing deductions under Section 80C not only helps in reducing tax liabilities but also ensures financial security for the future. It’s a strategic move that allows individuals to grow their savings while enjoying tax advantages.
By carefully considering these tax-saving options and making informed investment decisions before March 31, taxpayers can navigate the complexities of the tax system effectively. Stay ahead of the curve by exploring these avenues and securing your financial future with smart tax planning strategies.
Advance Tax Payment:
March 31 holds crucial significance for taxpayers who may have missed the deadline for paying their advance taxes by March 15. This date acts as a lifeline, allowing taxpayers to catch up and avoid penalties under Section 234B of the Income-Tax Act. Any tax payment made on or before March 31 qualifies as advance tax, provided it covers more than 90% of the assessed tax amount.
For those who may have inadvertently overlooked their tax obligations due on March 15, the opportunity to rectify the situation extends until March 31. By meeting this deadline, taxpayers can escape from interest charges under section 234B of the act, ensuring compliance with tax regulations.
Advance tax is a mandatory requirement imposed by the government, collected in quarterly instalments throughout the financial year. This ensures a systematic approach to tax payments, with specific deadlines to meet. The payment schedule includes 15% due by June 15, 45% by September 15, 75% by December 15, and the remaining 100% by March 15 of the financial year.
If you are a salaried individual with additional income sources such as fixed deposits or rental earnings, it’s crucial to make advance tax payments before March 15, 2024. This proactive approach helps in avoiding penalties and ensures smooth compliance with tax laws.
It’s worth noting that, as per the income tax act, advance tax shall be payable by a taxpayer during the financial year, if his/her estimated tax liability during that year is Rs 10,000 or more. But senior citizens aged 60 years or above, who do not have any income from business sources, are exempt from the requirement of paying advance tax.
Submitting Form 12B to New Employer:
For salaried individuals who have transitioned to a new job within the fiscal year spanning from April 1, 2023, to March 31, 2024, submitting Form 12B to their new employer is a crucial step. This form plays a pivotal role in ensuring accurate calculation of the total taxable income for the year, facilitating correct tax deductions, and enabling the issuance of Form 16 accordingly.
It is imperative for salaried taxpayers to submit Form 12B to their new employer if they have changed jobs during the current financial year and have not yet done so. This submission allows the new employer to compute the total taxable income for the year accurately. Consequently, the correct amount of tax can be deducted, and Form 16 can be issued to the taxpayer accordingly.
By submitting Form 12B in a timely manner, individuals can streamline the tax filing process, avoid discrepancies, and ensure compliance with tax regulations. This step not only benefits the taxpayer but also aids the employer in maintaining accurate records and fulfilling tax-related obligations.
Filing Updated Returns:
March 31 serves as the final opportunity for taxpayers to file their updated Income-Tax Return (ITR-U) for the Assessment Year 2021-22 (financial year 2020-21). This deadline extension provides a chance for individuals who missed the initial filing deadline to rectify the omission and comply with tax regulations.
ITR-U can be filed by individuals who were required to submit their Income Tax Return as per tax rules but failed to do so by the due date. It’s important to note that ITR-U cannot be used for claiming tax refunds, and any additional tax owed must be paid at the time of filing.
If an individual files the updated return (ITR-U) after the due date for filing a belated or revised return but before the completion of 12 months from the end of the relevant assessment year, the additional tax payable is set at 25% of the aggregate of tax and interest owed. In case of filing after completion of 12 months, the additional tax will be 50% of the aggregate tax and interest owed.
Ensuring timely submission of the updated Income-Tax Return (ITR-U) is crucial for taxpayers to avoid penalties, maintain compliance, and fulfil their tax obligations. By meeting this deadline, individuals can rectify any omissions or errors in their tax filings and remain in good standing with the tax authorities.
Minimum Investment in Govt Schemes:
Government savings schemes such as Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) require a minimum annual investment of Rs 500 and Rs 250, respectively. Failing to meet this minimum deposit requirement in any given financial year can result in your account being marked as default, potentially leading to penalties for reactivation.
If you have invested in these schemes but have not yet met the minimum investment amount for the current financial year, you still have time until March 31, 2024, to rectify the situation. By ensuring timely investment, you can avoid default status and prevent any penalties from being imposed on your account.
It’s crucial to stay on top of your investment commitments to government savings schemes to maintain the tax benefits they offer and avoid any financial setbacks. Take advantage of the opportunity before the deadline to meet the minimum investment requirements and safeguard your savings.
Conclusion:
As we approach the end of the current financial year, it’s the perfect moment to begin strategizing for the upcoming year. Now is the ideal time to assess your finances, including your income, debts, and financial goals. By taking stock of your financial situation, you can plan effectively to achieve your objectives and work towards financial freedom.
Use this opportunity to review your budget, savings, and investments to ensure they align with your long-term financial goals. Consider any adjustments or improvements you can make to enhance your financial stability and growth.
To Access the Income Tax Calendar 2024 CLICK HERE
To Access the CBDT Notification 34/2024 Dated 19 March 2024 CLICK HERE
Also Read