Income Tax Related work Should Be Completed Before Mar 31st, check list here

Jyoti — Sat, 15 Mar 2025 05:28:22 +0000

This financial year is going to end on 31st March. The date of 31st March is very important. The reason for this is that taxpayers have to complete many tasks before this date. If not completed, there may be problems in the future. Let us know about those tasks whose deadline is 31st March.

1. Payment of advance tax

If your tax liability is more than Rs 10,000 in the financial year 2024-25, then you have to pay the last installment of advance tax by March 15, 2025. If you miss the payment, then you will have to pay interest to the Income Tax Department under section 234C. Apart from this, taxpayers have to pay at least 90% of the tax liability to the Income Tax Department before March 31, 2025. If you do not do this, you will have to pay additional interest to the Income Tax Department under section 234B.

2. Tax-savings for financial year 2024-25

If you are using the old regime of income tax, then you can do tax-saving under Chapter VIA of the Income Tax Act. For this, you will have to make certain specific payments or investments:

(I) Section 80C: You can claim a deduction of up to Rs 1.50 lakh if you invest in investment options under section 80C. ELSS, life insurance policies, ULIP, PPF, Sukanya Samriddhi Yojana, NSC, tax savings FD, etc. come under 80C.

(II) Section 80CCD(1B): The Income Tax Department allows an additional deduction of Rs 50,000 on investment in NPS. This is in addition to the deduction available under Section 80C.

(III) Section 80D: Health insurance protects against sudden financial shock in case of a medical emergency. The Income Tax Department allows a maximum benefit of Rs 1,00,000 on mediclaim. Its limit is as follows:

Self, spouse and dependent children (below 60 years of age): Rs 25,000

Self, spouse and dependent children (above 60 years of age): Rs 50,000

Either or both parents (below 60 years of age): Rs 25,000

Either or both parents (above 60 years of age): Rs 50,000

Apart from the above limit, you can also claim deduction of up to Rs 5,000 paid on health checkup.

3. Submitting Form 12B

If you are a salaried employee and you have changed jobs, then for the correct calculation of TDS of the current employer, you will have to submit the income details from your previous employer in Form 12B. If you do not do this, he may deduct less TDS than the actual. Due to this shortfall in tax deduction, you may have to pay tax to the Income Tax Department while filing income tax return.

4. Minimum deposit in PPF and Sukanya Samriddhi

If you have opened a PPF account and Sukanya Samriddhi Yojana, then it is necessary to make a minimum deposit in both every financial year. You have to make a minimum deposit of Rs 500 in PPF. The minimum deposit in Sukanya Samriddhi Yojana is Rs 250. If you do not deposit the minimum amount, then your account may become inoperative.

5. ITR U for financial year 2020-21, 2021-22, 2022-23, 2023-24

If you have forgotten to file income tax return for the financial year 2020-21 to 2023-24 or you have discovered any mistake due to which you will have to pay tax and want to revise the ITR, then you have the option of filing an updated return in Form ITR U. Through this, you can pay tax on additional income till March 31, 2025. In Budget 2025, the timeline for filing income tax has been increased to four years, which was earlier 2 years.

6. Section-43B(h)-Payments by business enterprises to micro and small enterprises

Section 43B(h) was introduced in the Finance Act 2023. Under this provision, if any payment is due to micro and small enterprises, then it is necessary to pay it within 15 days if there is no written agreement and 45 days if there is a written agreement. Failure to do so will not allow business expenditure allowance during FY2024-25. Business owners will have to reconcile their payments to micro and small enterprises and make timely payments to avoid potential losses. If you are a manufacturer or service provider, you can apply for MSME registration. With this, you can avail the benefit of timely payment from your customers under this section.

If you have not been able to complete any of the work mentioned above, then you will have to complete it by March 31.

7. Tax loss harvesting

If you have made good gains in the financial year 2024-25, then you can do some tax savings. For this, you will have to sell some of your stocks or mutual funds on which you may be incurring some loss. Then you can adjust this loss with your gains. This will reduce your final tax liability. Short term capital losses can be set-off with both short and long term capital gains. But, long term capital gains can be adjusted only with long term capital gains.

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ULIP will be taxed like equity mutual funds, know here the rules of section 10(10D)

Jyoti — Tue, 04 Feb 2025 07:37:07 +0000

Unit Linked Insurance Policy: Budget 2025 presented on February 1 has cleared a lot of things regarding the taxation of redemption or maturity income of Unit-Linked Insurance Policy (ULIP). ULIPs with a total premium of more than Rs 2.5 lakh in a year are not eligible for tax exemption under Section 10 (10D).

With this, now such policies will be considered as equity-oriented mutual funds. That is, the tax regime for such policies will be the same as equity-oriented funds. Therefore, the profit received on maturity will be considered as capital gains tax. This new amendment in ULIP will come into effect from April 1, 2025.

Tax will have to be paid if the conditions of section 10(10D) are not fulfilled

The Income Tax Department’s FAQs state, “If the conditions of section 10(10D) are not fulfilled, then returns received under an insurance policy may be taxed as capital gains tax (for unit-linked insurance policies) or income from other sources (for policies other than ULIPs).”

Capital Gains Tax

Let us tell you that long term capital gains of more than Rs 1.25 lakh per annum on the sale of equity and equity mutual fund units are taxed at 12.5 per cent, while short term capital gains (holding period of less than 12 months) are taxed at 20 per cent. In Budget 2024, the capital gains tax structure was rationalized across different asset classes.

What is section 10(10D)

Under Section 10(10D) of the Income Tax Act, any amount received under a life insurance policy, including bonuses on such a policy, is exempt from tax. Hence, the amount received by the policyholder on maturity or the claim amount received by the nominee on the death of the policyholder is tax free. However, this exemption is subject to certain conditions. Tax exemption cannot be availed in cases where the annual premium exceeds 10 per cent of the sum assured.

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