Income Tax Planning & Important things to do by every individual before end of March -22
Last month to invest and save taxes
The existing financial year 2021-22 is about to end on March 31. This is the last chance to maximise tax benefits under various sections mentioned below the table. Despite being aware of this deadline, most of the investors postpone their income tax planning to the last minute. If you have not planned your tax-saving investments till now, then do it at the earliest and avoid common investment mistakes. To save your tax, do not buy unnecessary life insurance policies and borrow to invest for saving on taxes. Tax planning is a part of financial planning. Align your tax-saver investments with your goals and overall strategy.
| Sections | Income Tax Deduction for FY 2020-21 (AY 2021-22) | Who can Invest? | Limit for FY 2020-21 (AY 2021-22) |
| Section 80C | Investing into very common and popular investment options like LIC, PPF, Sukanya Samriddhi Account, Mutual Funds, FD, etc | Individual Or HUF | Upto Rs 1,50,000 |
| Section 80CCC | Investment in Pension Funds | Individuals | |
| Section 80CCD (1) | Atal Pension Yojana and National Pension Scheme Contribution | Individuals | |
| Section 80CCD(1B) | Atal Pension Yojana and National Pension SchemeContribution Tier-1 | Individuals | Upto Rs 50,000 |
| Section 80CCD(2) | National Pension SchemeContribution by Employer | Individuals | Amount Contributed or 14% of Basic Salary + Dearness Allowance (in case the employer is CG) 10% of Basic Salary+ Dearness Allowance(in case of any other employer) – Whichever is lower |
| Section 80D | Medical Insurance Premium and Medical Expenditure | Individual Or HUF | Up to Rs 1,00,000 |
| Section 80DD | Medical Treatment of a Dependent with Disability | Individual Or HUF | Normal Disability: Rs 75000/- Severe Disability: Rs 125000/- |
| Section 80DDB | Specified Diseases | Individual Or HUF | Senior Citizens: Upto Rs 1,00,000 Others: Upto Rs 40,000 |
| Section 80E | Interest paid on Loan taken for Higher Education | Individual | 100% of the interest paid up to 8 assessment years |
| Section 80EE | Interest paid on Housing Loan | Individual | Up to Rs 50,000 subject to some conditions |
| Section 80EEA | Interest paid on Housing Loan | Individual | Upto Rs 1,50,000/- subject to some conditions |
| Section 80EEB | Interest paid on Electric Vehicle Loan | Individual | Upto Rs 1,50,000 subject to some conditions |
| Section 80G | Donation to Charitable Institutions | All Assessee (Individual, HUF, Company etc) | 100% or 50% of the Donated amount or Qualifying limit, Allowed donation in cash upto Rs.2000/- |
| Section 80GG | Income Tax Deduction for House Rent Paid | Individual | Rs.60,000/- 25% of Total Income Rent paid – 10% of Total Income – whichever is lower |
| Section 80GGA | Donation to Scientific Research & Rural Development | All assessees except those who have an income (or loss) from a business and/or a profession | 100% of the amount donated. Allowed donation in cash upto Rs.10,000/- |
| Section 80GGB | Contribution to Political Parties | Companies | 100% of the amount contributed No deduction is available for contributions made in cash |
| Section 80GGC | Individuals on contribution to Political Parties | Individual HUF AOP BOI Firm | 100% of the amount contributed. No deduction is available for contributions made in cash |
KYC Update in your Bank Accounts
Customers are required to complete updating KYC by March 31, 2022. The Reserve Bank of India (RBI) had extended the deadline for KYC in bank accounts till March 31, 2022, from the previous deadline of December 31, 2021. The deadline has been extended again due to the surge in the Omnicron variant of the coronavirus in the country.
Customers need to visit their bank branch along with a set of self-attested documents, which include proof of identity and proof of address. The RBI has now allowed the use of digital channels for periodic updation of KYC details of customers. This includes video-KYC and submission of electronic documents through digi-locker to the financial institutions for verification purpose
Last Date for Filing Belated Returns / Revised Return:
The deadline for filing the income tax return (ITR) for the Financial Year (FY) 2020-21 or Assessment Year (AY) 2021-21 ended on December 31, 2021. But you can still file a belated return till March 31, 2022. However, to file a belated return, you may have to pay a penalty and additional interest on taxes. Besides, there are a few limitations of a belated return. Read more to understand.
A belated return is a return which is filed after the stipulated due date mentioned in the income tax rules. A belated income tax return attracts a late filing fee under Section 234F of the Income Tax (I-T) Act of Rs 1,000 in case the Gross Total taxable income during the financial year does not exceed Rs 5 lakh; or Rs 5,000 otherwise.
If you noted any mistake or discrepancy in your filled return now then you have the opportunity to file Revised return up to March 31, 2022.
Advance Tax Installment
The deadline for filing advance tax is approaching. Any person whose estimated tax liability for the year is Rs 10,000 or more is required to pay advance tax. The advance tax has to be paid in four installments in the financial year itself. The last date for paying the fourth installment of advance tax is March 15, 2022.
This applies to all taxpayers, salaried, freelancers, and businesses. However, a resident senior citizen (an individual of age 60 years or above), not having income from business or profession is not liable to pay advance tax. A salaried person, who doesn’t have any income other than salary, needs not to pay advance tax installments, as employers are required to deduct the applicable tax from monthly salary and pay to the department. Failure to pay correct advance tax on time or short payment of tax attracts penal interest.
PAN-Aadhar Linking
The last date to link your Permanent Account Number (PAN) with their Aadhaar card by March 31, 2022. If not done by the given deadline, the PAN card can become invalid and a fee of Rs 1,000 may be required for linking the PAN card with Aadhaar thereafter. If the PAN card is not linked to Aadhaar, an individual will also not be able to invest in mutual funds, stocks or open a bank account among other things as furnishing a PAN card in all those cases is a must.