The financial year 2016-17 is about to end. It is the time to clear and claim all the exemptions and deductions and reduce your tax liability for the year. When you employ effective tax planning strategies, you have more money to save or invest or both.
The Income Tax department does not want complicated information. But it is always better to file the taxes now because by tax planning we can arrange your affairs in ways that would postpone or avoid taxes altogether.
Here are 11 things to do before March 31, 2017:
1. Submit your investment proofs
For tax relief under section 80C, you have to submit the proof of investments to your employer.
- Receipt of insurance premium
- Investments made in PPF account
- Investments in equity-linked savings schemes (ELSS)
- Children's tuition fees receipts
- Purchase of National Savings Certificates (NSC)
2. Proof for HRA
For deductions under House rent allowance and travel receipts, you have to submit the following documents to your employer.
- Lease deeds
- Rent receipts
3. TDS certificates
You need to collect all your TDS certificates (tax deducted at source) from banks and your previous employer. This will help you to find out the interest income on bank deposits and pay balance taxes.
4. Home loan certificates
Repayment of home loan helps you to get the tax deduction. If you have availed home loan, then collect the repayment certificate from the bank from where you have availed the loan. To claim for deduction, you need to submit computation to your employer specifying the income under the head 'House Property' along with proof of interest and principal repayment.
5. Exchange old notes
Banned notes of Rs 1000, and Rs 500 can be exchanged at RBI offices till March 31. This is the deadline to change old notes.
6. Receipts of donations
Individuals can get the tax deduction for donations made also. You will get the reduction only if the donee trust or institution is registered under Section 80G. Collect the receipt for the donation amount to claim the deduction.
7. Health insurance premiums
You can claim a tax deduction for premium paid for your health insurance policy. Deduction under section 80D includes,
- Rs 25,000 on premium paid for health insurance of the assessee and family
- 30,000 limit for if the insured is a senior citizen
8. NPS active
Before March 31 you have to make your National Pension Scheme active. NPS Tier I account holders have to make a minimum the contribution of Rs 1,000 every fiscal. Do not make contribution for 2016-17 before March 31 can get your account frozen.
9. Capital gain
If you have sold or transferred any immovable property, mutual funds, shares etc, during the financial year, then you have to compute the capital gains or losses on these transactions.
10. Form 16
In case you have changed employment during the financial year, you have to go back to your previous employer and collect the Form 16.
11. Education loan
Interest paid for education loan is eligible for tax deduction. If you are claiming an interest-paid deduction on an educational loan, you have to get a certificate of repayment made in the financial year where the interest is stated separately.