10 Things to do before March 31
Post date: Feb 24, 2010 8:04:44 AM
March 31 is a significant date in India since the Indian financial year ends on that date. The income of the period April 1 to March 31 is considered your income for the financial year and you have to pay tax on this income.
If you are a salaried individual, you may be required to give necessary proofs to your employer so that he can consider and compute the balance taxes to be deducted from your salary. Alternatively, if you are having income like interest income, business income or you are self-employed, you may need to estimate the amount of income till March 31, so that necessary advance taxes can be deposited into the government treasury. “It is always advisable to maintain proper documentation of investment proofs and expenses incurred before the end of the financial year and keep them in records for future reference. These would also be required, in case your return is picked up for assessment. If you have not keeping the records, you should start from now,” says Vineet Agarwal, senior manager, KPMG.
Here are 10 things you should normally do before March 31, 2010, particularly to avoid the last-minute rush and claim all the available exemptions/deductions:
1. Submit the proof of investments / expenses
Submit to your employer the proof of investments/expenses that you have incurred to claim deduction under Section 80C of the Income-tax Act, 1961 (‘Act’). These includes receipt for insurance premium paid, deposits made in your public provident fund account, investment made in equity-linked savings schemes, National Savings Certificates purchased, children’s tuition fees paid, etc. Your employer would require the details and the documentary proof to provide you the deduction under Section 80C of the Act.
2. Proof for house rent allowance
If you are claiming deduction for house rent allowance, then ensure that you have submitted the necessary details and proofs like rent receipt, lease deed, etc, to your employer for claiming the benefit.
3. Collect bank statements, TDS certificates
Collect all your bank statements and Tax Deducted at Source (TDS) certificates, if any, from your bank. This will help you to compute the interest income on bank deposits and pay balance taxes, if any.
4. Collect home loan certificate
If you have a running home loan, you must collect the certificate of repayment of principal amount and the interest paid during the financial year from the bank/financial institution from which you have taken the housing loan. “You are required to provide a computation to your employer specifying the income/loss under the head ‘House Property’ along with the proof of interest and principal repayment, to claim deduction,” says Mr Agarwal.
5. Collect Form 16/Form 12BA from previous employer
In case you have changed employment during the financial year and not collected your Form 16 / Form 12BA from the previous employer, then you should collect the same now.
6. Collect valid receipts for donations
If you have made a donation to any charitable organization during the year, then ensure that you collect a valid receipt to claim deduction u/s 80G of the Act. The employer can provide the deduction of this donation in computing your taxes if you have made the donations to a few specified charitable institutions.
7. Obtain receipt for health insurance premium
If you are claiming deduction under Section 80D of the Act for payment of health insurance premium for self and family, then ensure that you have obtained receipt for the premium paid.
8. Keep necessary records for interest on educational loan
If you are claiming deduction for interest on educational loan, then ensure that you have the necessary records to substantiate the same.
9. Compute the capital gains
If you have sold/transferred any asset like house property, shares, mutual funds etc, then compute the capital gains and check the exemptions available to you. “A distinction is to be made between long-term and short-term capital gains because the tax rates are different for long-term and short-term capital gains,” says Mr Agarwal.
10. Compute your tax
Compute your tax for the year and assess whether you are required to pay any balance tax. The same can be paid as self assessment tax after March 31. To avoid the last minute rush of collecting the necessary documents, we should keep the above points in mind.
Ensuring that all documents are in place would help us in claiming all the available exemptions/ deductions. These simple things will help us in making sure that our journey to the new financial year is much smoother!
SOURCE: THE ECONOMIC TIMES