Put that awesome pen down, since it’s just useless talk. The financial year 2024-25 is now close to coming to an end, and May 1, 2025, will be the first day when any individual can start the Income Tax Return (ITR) filing for the assessment year 2025-26. The truth is that the submission is done in the events beyond this date; however, early preparation makes everything run smoothly and minimizes the tax burden.
According to Suresh Surana, a Mumbai-based Chartered Accountant, here are six important things to do before the end of the financial year on March 31, 2025, to minimize one’s tax liability and avoid an end-of-the-year mad rush.
1. Finalize Your Tax-Saving Investments
If you’ve opted for the Old Tax Regime, maximize deductions under sections like 80C, 80D, 80G, and 80CCD(1B). Here’s how:
- “Section 80C” allows you to save up to Deposited within PPF and ELSS mutual funds, premiums for life insurance, repayment of a loan principal, or fixed deposits for 5 years worth ₹1.5 lakh in investments.
- Section 80D: Claim a maximum deduction of ₹25,000 and ₹50,000 for senior citizens as health insurance premium deductions.
- Section 80G: Tax exemption benefits on giving to charity.
- Section 80CCD(1B): An extra deduction of ₹50,000 for contributing towards NPS.
Pro Tip: Take a look at your investments and ensure that you have optimally utilized these limits before it’s too late.
2. Submit Tax Deduction Proofs to Your Employer
Instead, you must submit your investment proofs (80C, 80D, home loan interest, under section 24B, etc.) to your employer before March 31 if you receive a salary. This will enable your employer to make the most accurate calculations in TDS deductions with no surprises at the end of the year in tax liability computations.
3. Adjust Your TDS or Advance Tax
You must immediately inform your employer or the TDS deducting authority if any of your income, deductions, or exemptions have changed, to be able to calculate the correct tax liability and avoid various penalties for underpayment.
4. Pay Advance Tax (If Applicable)
Advance tax payment before March 31 is necessary if your total tax liability exceeds ₹10,000. You will be charged interest under Sections 234B and 234C for not paying it within the due date.
5. Strategize for Capital Gains Tax
If you have made a profit from stocks, mutual funds, or property sales, properly plan for capital gains tax as follows:
- Offset losses against gains, which will reduce the amount of taxable income.
- Carry forward losses to later years if required.
- Use tax-loss harvesting to optimize tax returns.
6. Confirm Form 26AS, AIS, and TIS before showing ITR
Before filing an ITR, ensure the information on the Form 26AS, Annual Information Statement (AIS), and Taxpayer Information Summary (TIS) regarding the appropriate details of tax deducted at source, advance tax, and self-assessment tax is recorded correctly. Misdiscrepancies? Rectify it without further ado.
Final Words
Why wait last minute? Complete these six tasks before the deadline of March 31, 2025, and you will significantly reduce your tax burden and escape penalty, as well as a smooth filing of the ITR. Good tax planning today would bring eventual financial peace tomorrow.