It’s the tax season. Time to focus on tax saving investments. You get tax deductions under Section 80C up to Rs 1.5 Lakhs a year, on certain tax saving investments. This is the time to issue cheques, make online payments via NEFT and mobile banking to ensure investments are made on time for the financial year.
Sadly, this is a task many citizens neglect with severe consequences. Tax Planning is not a last minute job. If you don’t invest in tax saving schemes within the requisite deadlines, tax benefits are not available for this year. Make sure tax-saving investments are made before March 31st 2019.
Want to know more on Tax Planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.
The last date for filing Income Tax Returns or ITR was August 31st 2018 for the Financial Year 2017-18. (This is Assessment Year 2018-19). What if you missed this deadline?
You can still file ITR by March 31st 2019 called late ITR filing, but you will have to pay a penalty under the newly introduced Section 234F. The maximum penalty for late ITR filing is Rs 10,000. Is this rule applicable even for small tax payers?
If you are a small tax payer with gross total income not exceeding Rs 5 Lakhs, the maximum penalty is Rs 1,000.
Have you changed jobs in Financial Year 2018-19? Make sure to submit Form 12B to the new employer. In the last Company you might have submitted an investment declaration for tax saving investments to save taxes. Your previous employer would have deducted the taxes after accounting for tax saving investments.
The Form 12B statement submitted to the new employer shows the income and taxes deducted by the previous employer. After submitting Form 12B, the new employer furnishes a Consolidated Form 16 at the end of the year, based on details you have provided.
You can get a maximum tax deduction up to Rs 1.5 Lakhs a year on certain tax saving investments under Section 80C. Some of these investments are PPF, NSC, ELSS, 5 year tax-saver FD, EPF (own contribution) among others. This is a collective deduction up to Rs 1.5 Lakhs a year. Make sure to exhaust the Section 80C limit.
Look at Section 80D to save more tax. You get a tax deduction of a maximum of INR 25,000 a year, under Section 80D of the income tax act, on the premium paid for a health insurance plan, for self and family. Senior citizens get a maximum deduction of Rs 50,000 a year on premiums paid for health insurance.
Salaried employees must submit investment proofs so that employer can deduct the right TDS. Your employer would deduct extra TDS on not submitting tax saving investment proof. If you don’t submit investment proofs, the employer assumes there are no tax-saving investments.
Investments like PPF and NPS require a minimum investment each financial year. This is a must to keep the account active. If you don’t make the minimum investment, the account goes inactive. You will have to regularize it to make fresh investments. This could be time consuming and involves penalties. So, invest the minimum amount before the financial year ends. PPF has a minimum investment of Rs 500 a year and NPS has a minimum contribution of Rs 1,000 a year.
Most bank accounts are already linked with PAN. However, the income tax department has made a statement that for refunds, linking PAN with bank account is compulsory.
If you are expecting tax refunds from income tax department, make sure to link PAN with bank account. Refunds are directly transferred to bank account and the tax department issues only E-Refunds from 1st March 2019.
SEE ALSO: Tax saving proofs
Aadhaar-PAN linking is mandatory to file income tax returns or ITR. The Supreme Court has upheld the need to link Aadhaar with PAN by endorsing Section 139AA of the income tax act. It’s compulsory to quote Aadhaar while applying for a PAN Card or while filing Income Tax Returns. If PAN has already been allotted, it’s compulsory to link PAN with Aadhaar.
Many citizens involved in high-value transactions, like sale and purchase of property, do not quote PAN in spite of having a valid number. This is done to conceal high value transactions from the taxman. Compulsory linking of PAN with Aadhaar makes it tough to cover such transactions.
Interest income from bank fixed deposits is subject to TDS if interest income is more than Rs 40,000 in a financial year. This is Rs 50,000 a financial year in case of senior citizens. However, by submitting Form 15G / Form 15H in case of senior citizens to the bank, there will not be any TDS deducted from the income.
You must meet this condition for Form 15G/Form 15H:
Total income must not exceed basic exemption limit of Rs 2.5 Lakhs a year. This is Rs 3 Lakhs a year in case of senior citizens. Banks deduct TDS at 10% when PAN details are furnished. Its 20% if PAN details are not furnished.
Submit Form 15G or Form 15H before 31st March 2019 so that no TDS is deducted by banks if your income is not taxable.
You May Also Watch
Keep your Financial Cognizance up to date with IndianMoney App. Download NOW for simple tips & solutions for your financial wellbeing.
Have a complaint against any company? IndianMoney.com's complaint portal Iamcheated.com can help you resolve the issue. Just visit IamCheated.com and lodge your complaint. If you want to post a review on any company you can post it on Indianmoney.com review and complaint portal IamCheated.com.
Be Wise, Get Rich.
The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.
Subscribe to our Youtube Channel
This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.