Simply Save | How to make wise tax-saving moves before March 31

It’s that time of year once again when many tax-payers are rushing to complete their tax-saving exercise before the March 31 deadline.

You can claim tax deductions under section 80C on certain investments made during the financial year, on health insurance premium paid under section 80D, home loan interest paid under section 24(b) and so on. Salaried employees are required to submit investment proofs to their employers in December, January or February. Those who fail to do so have time until March 31 to make their tax-saver investments, but employers will deduct taxes based on your declared investments, which could means additional tax outgo. You can, however, claim tax refund for any excess tax deducted.

While March 31 is the last date to make your tax-saver investments for the financial year, the ideal time to kick off the exercise is in April, right at the beginning of the year. Nevertheless, if you are trying to complete the exercise at the eleventh hour, you need to steer clear of some common mistakes that tax-payers tend to make around this time. For instance, not investing enough time and effort into the process can leave them at the mercy of insurance agents who tend to push insurance-cum-investment plans that may be unsuitable. Since these are long-term products, you will have to pay premiums next year, too, to keep the policy in force. Others tend to miss claiming deductions on children’s school and college tuition fees paid in the hurry to exhaust section  80C’s Rs 1.5 lakh limit. Worse, some tend to borrow – or use their credit card –if their cash flows towards the end of year are not adequate to make investments.

In this week’s episode, Preeti Kulkarni speaks to Sudhir Kaushik, Co-founder and CEO, TaxSpanner.com, a tax consultancy portal. to understand how tax-payers can reduce their tax outgo efficiently at the last minute. Tune into Simply Save podcast for details.