It’s just over a month for 31 st March 2019, and not much time for the Financial Year 2018-19 to close, here’s a list of 5 things you must do to save tax for the current year, as once FY2018-19 is passé, certain tax breaks cannot be claimed as they are not carried forward. Let’s take a look:
- Make Investments under Section 80C
Time is inching closer for making investments that can be claimed for tax exemption under Section 80 C of the Income Tax Act. You can get Rs.1,50,000 exempted from your total taxable income if you make investments in special instruments like EPF, PPF, VPF, ELSS, ULIP, NSC, Bank FDs, Post Office FDs, etc. Besides, calculate the tuition fee you have paid for your wards in the Financial Year 2018-19 and submit the receipts of the same to get tax exemption.
Also, if you have a home loan, then you can claim the principal repayment under this section. Which means, if your home loan principal repayment accounts to Rs.1,50,000 then you may not need to make investments just for the sake of saving taxes.
- Section 80CCD
You can claim 50,000 exemption under Section 80CCD by investing in the National Pension Scheme (NPS). This exemption is over and above the Rs.1,50,000 deduction that you can claim under Section 80C. Furthermore, you can invest up to Rs.1,50,000 every year in your NPS account and plan your retirement portfolio well.
- Section 80D
A deduction up to Rs.1,00,000 can be claimed under Section 80D for expenditure on medical insurance for self, spouse and children, and for parents. The cap of Rs.25,000 applies for medical insurance premium paid for self, spouse and children for individuals less than 60 years of age. Same amount can be claimed additionally for medical insurance premium paid for parents (less than 60 years of age) irrespective of whether they are dependent or not.
If parents are senior citizens i.e. above 60 years of age then the medical insurance premium up to Rs. 50,000 can be claimed, similarly, if the individual himself is 60 plus then s/he can also claim a deduction of Rs. 50,000. Apart from medical insurance, expenses on preventive health check-ups up to Rs. 5,000 can be claimed for deduction under Section 80D, however, within the permissible limits as stated above.
- Submit Investment Proofs
Once you’ve made your investments right, its time to submit the investment proofs with your employer. If you fail to submit the investment proofs, you can end up getting more TDS deducted than required. Though, you can get the excess refund after filing your Income Tax Return for the year.
- Deduct TDS for Rent Payment
Lastly, Individuals are required to deduct TDS on rent if it is in excess of Rs.50,000 per month. The TDS has to be deducted in the last month of the financial year i.e. March 2019 and has to be deposited online via Form 26QC on tin-NSDL.com. Failure to deduct this TDS can make you pay 1% interest for each delayed month, which could turn monstrous (penalty of up to Rs.1 lac) if its delayed for over one year.
Apart from the above measures, if you’ve missed filing your Income Tax Return in the previous year, then the right time to file it is on or before 31 st March 2019. However, you’ll have to pay late filing charges up to Rs.10,000 depending upon your taxable amount.