31st March 2018 is the end of the financial year. There are a number of things that gets added up in the things to do list when we are almost reaching the financial year end such as claiming expenses, filing Income Tax Return, buying tax-saving investments etc. While most of us are really busy chasing the year end targets it is important that you have a keen look at your personal financial matters too. We have tried to explain here 5 Things to Do Before 31st March 2018.
1. File Pending ITR
Since the financial year will end on 31st March 2018, you must know that 31st March is the last date to file your income tax returns for the financial years 2015-16 and 2016-17. Just, in case you have failed to file your income tax return the previous year you can file your income tax return now. Failing to file your income tax return can attract a penalty up to Rs.5000/- under the section 217F of the income tax act.
2. Tax-Saving Investments
Your tax saving investments that you have made during the financial year 2017-18 form a part of your Income Tax Return that should be filed before 31st July,2018. Therefore, if you have not tax saving investments you must plan it immediately without any further delays as there are only a few days left in your hand, with only 4 working days in the last 7 days of March.
3. Health Check-Up
You can claim an additional tax deduction if you get your health check-up done before the 31st March 2018. You can claim up to Rs.5000/- under the Section 80C of the Income Tax Act for preventive check-ups. Many health insurance companies offer a reimbursement amount for preventive health check-up as per the policy scheme availed by you. You must keep in mind that the preventive health check-up may differ from company to company and only that amount is eligible for an exemption.
4. File Form 15G/H
If you have a fixed deposit or the interest income is more than Rs.10,000/- in a financial year then the bank will deduct a TDS from income drawn from the interest. However, if your income including the interest amount does not fall in the taxable limit then you can make use of a declaration form, Form 15 G/H and instruct your bank to not deduct the TDS amount. Form 15H is meant for Senior Citizens, whereas Form 15 G is meant for citizen falling under the non-senior citizen category.
5. Redeem Equity Investment to Avoid LTCG
A Long-Term Capital Gain (LTCG) from the equity oriented investment that has been booked after 31st March will be subjected to LTCG tax at the rate of 10%. Therefore, if you have any equity investments that have eventually become long-term (which should be either one year or longer for an equity), you can earn a tax-free return by selling them before 31st March 2018. You can also book profit on such investments before 31st March and buy again to reset your LTCG. For instance, if you have an existing investment of Rs. 10 lakhs along with Rs.2 lakhs as LTCG you must sell the entire portfolio and re-purchase the same on the consecutive day. This process will get reflected as fresh equity investment of Rs.10 lakhs in your books and you will not be required to pay LTCG tax since profit has been booked before 31st March 2018.
You must make sure that you stay financially alert and manage your financial matters in time before 31st March 2018 so that going forward you can reduce your tax liability to the maximum.Main Category: Finance, Others