In March, there are several deadlines to be met by taxpayers and investors for this fiscal. After this month, many money rules will change and you will end up paying a penalties for unmet last dates. Here are some key regulatory and operational changes that are likely to affect your financial life.
Last month to invest and save taxes
The existing financial year 2021-22 is about to end on March 31. This is the last chance to maximise tax benefits under various sections. Despite being aware of this deadline, most of the investors postpone their income tax planning to the last minute. If you have not planned your tax-saving investments till now, then do it at the earliest and avoid common investment mistakes. To save your tax, do not buy unnecessary life insurance policies and borrow to invest for saving on taxes. Tax-planning is a part of financial planning. Align your tax-saver investments with your goals and overall strategy.
File belated income-tax returns
The deadline for filing the income tax return (ITR) for income earned in Financial Year (FY) 2020-21 or Assessment Year (AY) 2021-21 ended on December 31, 2021. But you can still file a belated income-tax return till March 31, 2022.
A belated return is a return which is filed after the stipulated due date mentioned in the income tax rules. Make sure you file a return before 31 March and do not miss this deadline. Because, “if the March deadline is missed, then the taxpayer will not be able to voluntarily file the income tax return (ITR). In such a case, the ITR can only be filed in response to a notice from the Tax department,” says Vivek Jalan of Tax Connect Advisory Services LLP, a consulting firm. He adds, a belated income tax return attracts a late filing fee under Section 234F of the Income Tax (I-T) Act of Rs 1,000 in case the Gross Total taxable income during the financial year does not exceed Rs 5 lakh; or Rs 5,000 otherwise.
Complete PAN-Aadhaar linkage
The last date to link PAN card with Aadhaar is now March 31, 2022. It got extended from September 30, 2021. After the deadline ends, all the PAN cards which are not linked to Aadhaar would be declared inoperative. You cannot make any financial transaction if your PAN is not linked to your Aadhaar.
PAN card is mandatory for opening a bank account, buying mutual funds or shares, and even making cash transactions of over Rs 50,000. Financial institutions ask for PAN from their existing customers periodically for KYC purpose. If PAN is inactive, then the account could be impacted.
A penalty of Rs 10,000 may apply as per Section 272B of the Income Tax Act if you fail to link the two documents by the deadline and your PAN becomes inoperative. It will be assumed that your PAN has not been furnished as required by the law.
You can link them through the e-filing website, by sending an SMS to 567678 or 56161 and typing UIDPAN or do it offline through PAN services centres of National Securities Depository Limited (NSDL) and UTIITSL.
Update KYC in your bank accounts
The Reserve Bank of India (RBI) had extended the deadline for updating Know Your Customer (KYC) in the bank accounts to March 31, 2022, from the previous deadline of December 31, 2021. The RBI had notified it because of the rise in Omicron variant cases in the country.
Banks insist on updating KYC for account holders periodically. Customers need to visit to their bank branch along with a set of self-attested documents, which include proof of identity and proof of address. The RBI has now allowed the use of digital channels for periodic updation of KYC details of customers. This includes video-KYC and submission of electronic documents through digi-locker to the financial institutions for verification purpose.
Some of the leading banks, such as the State Bank of India (SBI) also allow customers to submit their documents to update their KYC details, via email or post. If the customer misses the last date for updating the KYC, then the bank would freeze the account.
Pay your last advance tax instalment
Income tax rules state that if your annual estimated income tax in the current financial year is at least Rs 10,000, then you have to pay advance income tax in four instalments throughout the year. Your last instalment deadline for income earned in 2021-22 is March 15, Tuesday.
This applies to all taxpayers, salaried, freelancers, and businesses. However, a resident senior citizen (an individual of age 60 years or above), not having income from business or profession is not liable to pay advance tax. A salaried person, who doesn’t have any income other than salary, need not pay advance tax instalments, as employers are required to deduct the applicable tax from monthly salary and pay to the department. Failure to pay correct advance tax on time or short payment of tax attracts penal interest.
PMAY subsidy ends
The Pradhan Mantri Awas Yojana (PMAY) is an initiative of the Government of India which aims at providing affordable housing to the Economically Weaker Section (EWS) / Low Income Group (LIG) segment. On June 1, 2015, the government launched the scheme. The interest rate for the PMAY scheme starts at 6.50 per cent p.a. and can be availed for a tenure of up to 20 years. The last date for availing the benefit of PMAY credit linked subsidy scheme (CLSS) for the LIG and EWS categories is March 31, 2022.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
