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Tax checklist - 10 things you must do before March 31

March 31, the tax year-end is almost here. To ensure that all your tax matters and paperwork are in order, we have prepared the following checklist for you. You still have 3 weeks to plan for things, so hopefully you can set your tax affairs in order if you haven't already done so.

Many of the following relate to receipts and documentation that you need to have ready as proof about the state of your tax and financial matters. While hard copies of these don't necessarily need to be shared with the tax department, you need to share these with your employer, who will make the appropriate adjustments towards your deductions, allowances and TDS so that you are not overpaying or underpaying taxes.

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1. Final date for submitting investment proofs: March is the last month of the financial year by which time you should have submitted your 80C investment proofs. If its not too late already, rush and give your proofs to your payroll department so that you can avail of up to Rs 1 lakh of tax deduction.


2. Rent and travel receipts for allowances: If you intend to claim HRA and LTA benefits, then you need to ensure that your rent and travel receipts have been submitted to your employer.


3. Telephone, medical and other bills: If your employer is offering you any reimbursements towards telephone charges, medical expenses, etc., then you must submit the relevant receipts to your employer. If you don't, then your employer will have no choice but to tax these as taxable allowances. This will reduce your cash in hand.

   Further you must ensure that all the reimbursements are backed by adequate cash withdrawals and payments from your salary account. Otherwise, you might not be able to justify the expenditure before tax authorities in case of an inquiry.



4. Principal and interest repayment certificate from home loan lender: If you have any home loan outstanding then you must ensure that you collect the relevant principal and interest repayment certificate from your lender. You will need to submit this to your employer.

   Any interest cost you pay towards your loan will make you eligible for a tax exemption, but to get this exemption you need to show the documentary proof to your employer. Similarly, if you want to claim the 80C deduction towards repayment of your principal on the home loan, you need to share the proof with your employer.



5. TDS certificate from previous employer: If you have changed employment during the course of the financial year, then you need to collect your TDS certificate (Form 16) from your former employer, and submit this to your new employer to ensure that the right amount of tax deductions are being accounted for in your salary.

   In case you have not received a Form 16 from your previous employer, you can view your tax credit online by applying for the same. (http://www.tin-nsdl.com/panregistration.asp)

   This small exercise can potentially save you huge penal interest on your taxes at the time of filing your returns.



6. TDS certificate from rental and interest income: If you earn rental income from property, or interest income from bonds or FDs, then you need to collect your TDS certificate (Form 16A) from the deductor showing if any taxes have been deducted during the financial year on payments made to you.


7. Capital gains and available exemptions: If you have you sold or transferred any capital asset like house property, shares, mutual funds etc. during the year, then you need to compute capital gains/losses on these transactions. You need to calculate the holding period of the assets to see if they will be classified as long term or short term. Your taxability will be determined depending upon the classification and the type of asset. You must also check if you might be eligible for certain exemptions if applicable to your case.

   Capital gains can be disclosed to the employer, but the tax liability can be met by paying advance tax as well.



8. Claim full amount of deductions: Every year, during the tax-filing season we come across 1,000s of taxpayers who despite sizeable income levels do not claim the full tax deductions under section 80C (investment, insurance etc.), 80D (health benefits) and other tax friendly sections. Whether out of lack of time or understanding, the only loser is the taxpayer for leaving money on the table.

   Don't leave money on the table, use your full deduction amount.



9. Receipt from donations: If you have made a donation or intend to make a donation, then check if the donee trust/institution is registered under section 80G so you can claim a tax deduction towards the donation. Ensure that you get a receipt for the donation amount.


10. Pay off any outstanding tax dues before the deadline: While assessing your income from various sources, if you have any tax liability that you have not already paid (after taking into account your tax deductions), then do so as soon as possible. The deadline for advance tax is March 15, 2010. If you do not pay off your liabilities, you might be vulnerable to pay a hefty penal interest for late payment of your tax dues.

Comments

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Prakash N.S. said : 23/03/2011	I pay assessment and property taxes being the member of the CHS .Ltd. Am I eligible to get the I.T. rebate?. please let me know. thanks
vinod khann said : 11/03/2010	Most of the points are relevant for tax filing in July and not for March 31st.
R.K.Khanna said : 11/03/2010	It's good to read points for calcullation of income tax. Thanks