- Date : 12/03/2021
- Read: 4 mins
With the end of the financial year fast approaching, taxpayers are scrambling to complete all their financial and tax-related tasks before the March 31 deadline.
It’s that time of the year again. FY 2020-21 is drawing to a close, and so is the deadline for certain financial tasks. Government dues, late payment of interest, late fees, penalties, etc. can result in a larger-than-necessary strain on your income and burn a hole in your pocket. But all this can be avoided if you are diligent with filing and pay your income tax on time.
If you haven’t already done so, there are a few things you must complete before March 31.
Linking PAN with Aadhaar
The Income Tax Department has made it mandatory for taxpayers to connect their PAN cards with Aadhaar. Taxpayers cannot file an Income Tax Return without linking their Aadhaar and PAN. The deadline for linking the two has been extended to 31 March 2021, so do it at the earliest. If you fail to not link your PAN with Aadhaar, your PAN will become inoperative from 1 April 2021. What’s more, the IT Department can fine you upto Rs 10,000.
Filing advance tax
Advance tax is income tax charged in advance rather than in a lump sum at the end of the year. Under the Income Tax Law, if a person has a tax liability of more than Rs 10,000 a year (except senior citizens not having professional income), then they are liable to pay advance tax in four instalments. Remember the due dates for advance tax payable are on or before July 15, September 15, December 15, and March 15.
Filing belated or revised IT returns
Belated tax returns are filed after the extended return filing deadline stated in Section 139(4) of the Income Tax Act. Revised income tax reports are filed if taxpayers find a mistake after filing their initial tax returns. Returns filed belatedly can also be revised. In the case of Assessment Year 2020-21, the revised return can be filed anytime on or before 31 March 2021.
If you have not filed returns for a specific year for more than two years, the Income Tax department will notify you. If you receive one of these notices, make sure to begin reviewing and filing your tax returns as soon as possible before the deadline. Missed your ITR deadline? Here are the next steps.
Maximising tax-saving instruments
Under Section 80C of the IT Act, an individual or HUF taxpayer can claim tax exemption up to Rs 1.5 lakh if they invest or spend in specified products before the end of the year. For FY 2020-21, such investments are to be done before 31 March 2021. You will lose this tax saving benefit if you miss this date. If this deadline is missed, you will not be able to file revised or belated ITR for financial year 2019-20. Belated ITR will be submitted with a late filing fee of Rs 10,000 on or before 31 March 2021.
Related: Tax-saving components of your CTC
Paying TDS on rent over Rs 50,000
If you are paying a monthly rent of Rs 50,000 or more for your residence, you are required to deduct tax at source. This is TDS, and as per the income tax laws, this rate is at 5 percent of the rent paid. If the TDS is not deducted and paid before March 31, you will be held liable to pay interest and penalty as well.
Vivad se Vishwas
With the objective of reducing pending income tax litigation, generating timely revenue for the government, and benefiting taxpayers, the Income Tax Department enacted the Direct Tax 'Vivad se Vishwas' Act, 2020 on 17 March 2020. The deadline to submit a declaration under the Vivad se Vishwas scheme has been extended until 31 March 2021. As per a notification from the Central Board of Direct Taxes, the date for payment of tax without additional interest under the scheme remains unchanged at 30 April 2021. Avail LTC benefits on your insurance purchases till March 2021.