March 31, 2023 is significant as there are some important tasks to be completed by this day. While the government has extended some of the deadlines, there are still a few which exits. These ranges from planning taxes to filing updated income tax return (ITR). Missing on these means individuals would have to pay penalties or face other consequences. Let's take a look at them:
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Tax saving investment
The deadline for tax-saving investments for FY2022-23 will end on March 31, 2023. Tax planning is one of the important measures for financial planning as the main objective is to reduce tax liability and save more. The lesser tax one has to pay, the more disposable income one has. While taking advantage of tax-saving options available, one can save a significant amount of taxes.
Filing updated ITR for FY19-20
The deadline to file updated income tax return (ITR) for FY 2019-20 is March 31, 2023. So, taxpayers who missed filing it for the said financial year or may have missed reporting any income can file an updated ITR or ITR-U. The Finance Act of 2022 introduced the concept of updated returns to allow a longer duration for an assessee to file the return of income.
An updated return can be filed within 24 months (2 years) from the end of the relevant assessment year (subject to certain conditions). Hence, if taxpayers missed filing it for FY2019-20, they can do the same now till March 31.
Investing in Pradhan Mantri Vaya Vandana Yojana
Pradhan Mantri Vaya Vandana Yojana, an insurance-cum-pension initiative to provide assured pensions to senior citizens in their retirement, is available for investments till March 31, 2023. Under this scheme, investors get a guaranteed pension at the rate of 7.4 percent for 10 years which can be between Rs 1,000 to Rs 9,250 per month.
The payment can be after a month, 3 months, 6 months, or after a year of investment.
Investing in special fixed deposit of banks
Lenders are ending their special FD offers by March 31, 2023. Currently, the State Bank of India (SBI), HDFC Bank, IDBI Bank and Indian Bank are offering limited-period special FDs with higher interest rates. These include SBI Amrit Kalash deposit, HDFC Senior Citizen Care FD, IDBI Bank Naman Senior Citizen scheme, among others.
Investing in debt funds to avail taxation benefits
Investors can use the window available till March 31, 2023 to invest in debt funds. However, this should be tactically done.
From April 1, 2023, the gains from mutual funds where not more than 35 percent is invested in equity shares of Indian company i.e. debt funds, will be considered to be short-term capital gains.
Buying a high-value life insurance policy
Investors considering buying insurance policies with high premiums should buy it March 31, 2023. From April 1, if premium paid by an individual for a savings life policy is more than Rs 5 lakh than on maturity the income from policy will be taxed. The threshold of Rs 5 lakh will be applicable on first year premium and not first year + renewal.
Submit form 12B to your new employer
Those who have switched jobs during the current financial year (ie, between April 1, 2022, and March 31, 2023) and have not yet submitted Form 12B to their new employer, it is advisable to do so before the end of the financial year. This will help the new employer to calculate total taxable income for the year and deduct the correct amount of tax accordingly.
While new employers can't force anyone to submit form 12B, it is always advisable to do the same to reduce the tax burden and start with proper tax planning.
First Published: Mar 29, 2023 4:58 PM IST
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