Today we discuss on the TAX Planning for the month of March 2016. In Indian accounting the financial period will be from 1st April 2015 to 31st March 2016. Books of accounts should be closed on 31st March 2016 that’s why March 2016 is considered as the year end period. As you all know ‘To save the money is ultimately make the money’ and you can save the money by saving the income tax. to save the income tax it is very important to do proper tax planning in the month of March 2016.
Tax planning for all income Taxpayer –
Tax Planning for all the tax payers who has earned the income in any of the five head of income tax act 1961. Income in house property, Capital gain, business or profession income, salary income, other source income (interest,dividend etc)
What Tax Planning an Income Taxpayer Should do In the Month of March 2016 ?
For Proper tax planning every taxpayer should assess his provisional income till the month of March 2016.
After assessing his provisional income A taxpayer should cross check the income and TDS by view the form 26AS.
To view TDS credit by visiting Form 26As read the blog how to check the TDS Credit
After assessing his income an taxpayer can do tax planning in the month of March 2015 related to the eligible investments. An Assessee after assessing his income should plan how much to invest in insurance policy, Public provident fund, Sukanya Samriddhi Yojana , medical insurance ,donation etc. Certain exemption in income tax is available on payment basis only An Assessee can’t claim certain Payment done after the month of March 2015.
Following payment to be done before the March 2016 end by income taxpayer –
An Assessee should pay the LIC premium, Sukanya Samriddhi Yojana, national saving certificate, equity linked saving scheme, tuition fees for your children before 31st March 2015.
If an Assessee wants to help other people make some donation from his income earned than taxpayer can also claim tax benefits by paying the money to charitable trust registered under 80G.
A taxpayer can also claim tax benefits under section 80GGC by paying donation to the registered political party before March 2015 end.
A taxpayer can also claim the medical insurance benefits by taking the medical insurance policy in the name of his or his spouse.
Tax planning for Salary taxpayer in the month of March 2016–
there is very little scope for the tax planning for salary employee . A salary taxpayer can save the TDS by giving the details to the employer before the March 2015 end Home loan certificate, Rent agreement, LIC premium receipt, Medical premium receipt, medical bill etc.
Tax planning for business and profession taxpayer in the month of March 2016–
Tax planning for the taxpayer earning the income in the head business or profession income – An taxpayer can do tax planning only after correct assessing his income.
For the correct assessing of income tax a taxpayer should do the following check in the month of March 2015 2015 .
Cross check the bank books with the bank statement, made reconciliation if any difference arises.
Check the cash book balance with the physical cash.
Take the physical stock as on 31st March 2015 and verify the stocks in books of account with the physical stocks available.
Passed the depreciation entry on fixed assets
An taxpayer should booked all his interest income
Cross check the debtor and creditor ledger.
An business and profession taxpayer can also claim the tax benefits of 175 percent by making donation for scientific research trust
If business and profession taxpayer Maintain books on cash basis –
If any taxpayer earned the income in the head business or profession and maintaining the books of account on cash basis than he should pay the outstanding expenses before the March 2015 end to claim the expenses in income tax.
If business and profession taxpayer Maintain books on Accrual basis –
If any taxpayer maintains the books on accrual basis than he can pay the outstanding expenses after the March 2015 end to claim the expenses in income tax. But TDS need to be deducted in the month of March 2015.
It is advisable to all the income taxpayer to do proper tax planing before the end of the March 2015 month.