Given the fiscal year close to March 31, tax professionals must take critical steps in keeping with fiscal responsibility and enhancing savings on tax payments. The people must weigh the tax payments based on the former and current system of taxation in order to finalize the most rewarding option.
The old tax system allows for deductions like ₹1.5 lakh under Section 80C for PPF, ELSS, and tax-saving fixed deposit investments, health insurance under Section 80D, and interest on home loans under Section 24(b).
Contributions to charities and political causes are offered as deductions under Sections 80G and 80GGC. Meanwhile, the new tax regime has lower rates but eliminates most deductions, except for a ₹50,000 standard deduction and rebate under Section 87A on income up to ₹7 lakh. Taxpayers must notify their employers of their preferred regime by March 31, as the new regime is now the default.
Some Important aspects for March-end Income Tax Checklist
- Provision of an updated income return for the Assessment Year 2022-23: For income tax, the deadline to submit the updated return is 31st March 2025, if the taxpayer has committed mistakes or omissions in their original or revised return for the FY.
- Investment for Deduction: If deduction under section 80 (for example. 80C, 80G) must be claimed for Income tax in F.Y. 2024-25, so every taxpayer needs to check the Income tax limits and their tax obligations, and should invest, donate, etc. before 31st March 2025.
- TDS on Salary: Employees receiving a salary must provide their Employer with information regarding Investments and deductions to prevent extra TDS deduction in March.
- Annual Information Statement (Form 26AS): Each taxpayer must download Form 26AS and confirm TDS deducted/TCS collected. In the same way, taxpayers ought to confirm the Income stated in 26AS and AIS (Annual Information Statement) against their Books of Accounts. Additionally, verify the SFT transactions such as mutual fund purchases if the total amount is Rs. 10 lakhs or above in a financial year, buying or selling of immovable property if the transaction amount or assessment by Stamp Valuation Authority is Rs. 30 lakhs or above, etc., are showing in the Form 26AS or not.
- Form 15 G/ H: Taxpayers with income solely from interest that falls below the basic exemption limit can submit this form either manually or online.
- Recording of Losses: Taxpayers with underperforming shares, particularly those who have not recognized capital losses, must make sure to accurately record and register capital losses before 31st March. These losses may be offset against taxable capital gains or can be carried forward for a maximum of 8 years to counter future gains.
- Deduction for statutory obligations: If the taxpayer uses a cash basis accounting system and intends to claim the deduction for statutory obligations paid, he must complete the payment of those obligations by 31st March.
- Year-End Stock Verification: Every taxpayer must verify their stock at the end of the year. In addition, the verification of real estate should be conducted and compared to the book value. If it does not align, then create the reconciliation statement.
- Comparative Balance Sheet and Profit and Loss A/c: Taxpayers are required to compile a Comparative Balance Sheet and Profit and Loss Account for the year. This will help them understand the overall turnover, profit and loss, expenses, etc. Likewise, verify the accounting ratios too.
Read more : ITR Filing: 7 Steps to File ITR Without Form 16
Conclusion
Prompt planning is crucial for taxpayers. Individuals with financial responsibilities need to complete payments by March 31st. Additionally, accounting allowances for various taxes need to be finalized within the financial year. Effective planning guarantees a seamless tax filing experience and prevents last-minute complications. Therefore, finish all outstanding tasks before March concludes and greet the new financial year with a fresh start!
