Today we discuss on the TAX Planning in the month of March In Indian accounting the financial period will be from 1st April to 31st March . Books of accounts should be closed on 31st March that’s why March 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 .
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 ?
For Proper tax planning every taxpayer should assess his provisional income till the month of March .
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 end by income taxpayer –
An Assesses 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 Assesses 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 –
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.
Please also read our Blog Declaration to be submitted by the salary employee
Tax planning for business and profession taxpayer in the month of March –
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 .
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 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.
Check the unnecessary entry Loan, Advance etc and try to close it before March
Check withdrawal from the banks by directors. As Dividend distribution tax will be applied if director withdraw more than remuneration.
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 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 end to claim the expenses in income tax. But TDS need to be deducted in the month of March .
It is advisable to all the income taxpayer to do proper tax planing before the end of the March month
Last Minutes Action in the Month of March
1 File the return for the Financial year 2014-15, Assessee can not file the return after march
2 File the return for the Financial year 2015-16 to save the penalty of RS 5000/-
3 Pay the Advance tax to minimise the interest expenses
4 Pay the LIC, PPF, Mediclaim etc Deduction amount of 80C before march,
In Recent budget 2017 government has made an announcement that Assessee can not file the return more than one year and fine of Rs 5000 if filing the return after due date. the Question arises are-
Last Date of filing of Return for Financial Year 2015-16
It will be 31st March 2018, there will be penalty of Rs 5000/- no fees on that.
Difference in Penalty and Fees
Penalty – Government may levy penalty and fees is the compulsory payment there is no waiver of the fees while penalty may be waived off by the department.