Personal Tax: 10 things to do before March 31

Indian financial year runs from 1 April to 31 March. Accordingly, the Income-Tax Return is to be prepared and filed for the relevant financial year.

31st March is an important date as it marks the end of a financial year. The last few weeks are when we rush for the documents/investment proofs, based on which we compute our tax liability.

The income-tax department has done away with the requirement of filing any supporting documents like investment proofs, etc, along with the return of income. It is, however, prudent to collect the same before the end of the financial year and keep them in records for future reference. These would also be required, in case your return is picked up for assessment.

Here are ten things to do before March 31, 2009 i.e. before the current financial year ends:

1. Submit to your employer the proof of investments/expenses that you have incurred to claim deduction under Section 80C. These includes receipt for insurance premium paid, deposits made in your public provident fund account, investment made in equity-linked savings schemes, National Savings Certificates purchased, children’s tuition fees paid, etc. Your employer would require the details and the documentary proof to provide you the deduction under Section 80C.
2. If you are claiming deduction for house rent allowance, then ensure that you have submitted the necessary details and proofs like rent receipt, etc, to your employer for claiming the benefit.
3. Collect all your bank statements and Tax Deducted at Source (TDS) certificates, if any, from your bank. This will help you to compute interest income on bank deposits and pay balance tax, if any.
4. If you have a running home loan, you must collect the certificate of repayment of principal amount and the interest paid during the financial year from the bank/financial institution from which you have taken the housing loan. You are required to provide a computation to your employer specifying the income under the head ‘House Property’ along with the proof of interest and principal repayment, to claim deduction.
5. In case you have changed employment during the financial year and not collected your Form 16, then you should collect the same now.
6. If you have made a donation to any charitable organization during the year, then ensure that you collect a valid receipt to claim deduction u/s 80G.
7. If you are claiming deduction under Section 80D for payment of health insurance premium for self and family, then ensure that you have obtained receipt for the premium paid.
8. If you are claiming deduction for interest on educational loan then ensure that you have the necessary records to substantiate the same.
9. If you have sold/transferred any asset like house property, shares, mutual funds etc. then compute the capital gains and check the exemptions available to you. A distinction is to be made between long term and short term capital gains.
10. Compute your tax for the year and assess whether you are required to pay any balance tax.

These are few of the important steps that one should take care of while preparing one’s tax computation. It would be a good idea to take the necessary action now to avoid the last minute rush of collecting the details and ensuring that all the available exemptions/deductions are claimed.

[Source: economictimes.indiatimes.com]