“In this World, nothing is certain but death and taxes.” Yes, Its tax time. March 31st will soon be here. The financial year 2016-17 is coming to an end. It’s time to welcome financial year 2017-18. Before welcoming the financial year 2017-18, you have to claim all tax exemptions and deductions for the financial year 2016-17. This is an art which saves your money called tax planning. “Tax evasion is a crime, tax avoidance is not.”
After demonetization, the Government is chasing tax evaders. Tax evaders just have no place to hide. It’s time to get smart and learn 5 things to do before March 31st. Want to learn more on tax planning? Just leave a missed call on IndianMoney.com financial education helpline 02261816111 or just post a request on IndianMoney.com website. IndianMoney.com offers Free, Unbiased and on-call financial advice on Insurance, Mutual Funds, Real Estate, Loans, Bank Accounts and capital markets.
Forgotten to file income tax returns for the Financial Year 2014-15 (Assessment Year 2015-16)? March 31st 2017 is the last date to do so. If you do not file income tax returns for the Financial Year 2014-15 before March 31st 2017, the income tax department can refuse to accept your returns.
You must file the pending income tax return for the Financial Year 2015-16 by 31st March 2017. What happens if you have taxable income in the Financial Year 2015-16 and do not file income tax returns by 31st March 2017? The tax officer can charge you a penalty of INR 5,000, if you fail to file income tax returns before 31st March. This decision is left to the tax officer.
Let’s say you have worked with more than one employer during the previous year and you have not provided details of the salary you have received, to your present employer. Your current employer does not have any idea about the income from your previous job and does not deduct TDS (Tax Deducted at Source).
The income tax department has a record of your salary earned in the current Company and also the previous employer. You have to pay tax on the combined income you have earned in the financial year. Include the entire salary you have earned from both employers, while filing income tax returns to avoid getting an income tax notice.
You get a tax deduction up to INR 1.5 lakhs a year, under Section 80 C of the income tax act. You get this benefit, only if you invest in certain tax saving financial instruments. You can invest in ELSS, 5 year tax saver fixed deposit, NSC, PPF, Post office deposits, EPF, Senior citizen savings scheme up to INR 1.5 Lakhs a year, to enjoy Section 80C deductions.
You get tax deductions on the EMI (Principal component) of your home loan, under Section 80C of the income tax act, up to INR 1.5 Lakhs a year. You pay a premium and avail a life insurance plan. You get a tax deduction, up to INR 1.5 Lakhs a year, under Section 80C of the income tax act, on the premium you pay for the life insurance plan.
You get a tax deduction under Section 80C, up to INR 1.5 Lakhs a year, on the tuition fees, paid for your children’s education. You can avail the Section 80C deduction, only for two children. If you have not invested in these specific financial instruments which enjoy Section 80C deductions, do so now.
If you earn a salary, you need to submit investment proofs to your employer for the Financial Year 2016-17. You need to submit proof for claiming HRA exemptions, Medical reimbursements and any other tax exemptions. You also need to submit proof of investments to claim Section 80C and other tax deductions. If you do not submit the proofs in time, your employer would deduct excess TDS (Tax Deducted at Source) on your salary. You can always claim refund of this TDS, when you file income tax returns. But, it’s best to submit investment proof to your employer in time.
The March 31st deadline soon approaches. Get ready for it. Do your tax planning and save your hard earned money. Be Wise, Get Rich.
Mr C.S.Sudheer is a management graduate. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.