ads

Five things you could do before March 31 to save on income tax – Times of India



NEW DELHI: As the financial year draws to a close, it is time to make sure you have optimised the tax benefits available to you. Besides utilising the deductions under Section 80C, there are other steps that can help reduce your taxes. Here are some smart tax moves to make in the next few days.
Open A National Pension System Account
Most taxpayers would have already exhausted the Rs 1. 5 lakh tax saving limit under Section 80C. But have you also availed the additional Rs 50,000 deduction for the National Pension System (NPS) contributions under Sec 80CCD(1b)? Open an NPS account today to save more tax this year. In the 30% bracket, you stand to save up to Rs 15,600 in tax. If your PAN is linked to your Aadhaar, opening an NPS account online takes barely 10-15 minutes. Log on to the NPS website at enps. nsdl. com and follow the instructions to open an account.
Harvest Capital Gains And Losses
Stock markets have been very volatile over the past two years. Whether you have made gains or suffered losses, it is time to book them before March 31. Long-term capital gains of up to Rs 1 lakh are tax free. So it makes sense to sell some winning stocks and mutual funds to book taxfree gains of up to Rs 1 lakh. You can buy them back the very next day.
If you have been unlucky in the stock market, it’s time to book your losses. These losses can be adjusted against gains from other investments. Long-term capital losses can only be offset by long-term capital gains. However, short-term capital losses can be offset by short-term or long-term capital gains. What’s more, the unadjusted losses can be carried forward for up to eight financial years.

Buy Life Insurance For The Tax Advantage

The tax-free return from life insurance is one of the main reasons it is so popular with investors. But this year’s Union Budget has proposed to tax the maturity proceeds of life insurance policies if the aggregate annual premium exceeds Rs 5 lakh. If this proposal is passed, then policies bought on and after April 1, 2023, will become taxable. If you are looking to invest in a life insurance policy, buy a policy before March 31 to get the tax advantage.

Invest In Debt Funds For Double Indexation Benefit

After consistent rate hikes by the central bank, there are indications that the interest rate cycle is turning. If rates go down or even remain static, debt funds will deliver good returns. But there is another reason to buy debt funds and other non-equity schemes on or before March 31. The indexation benefit is available if the investment is held for at least three years. However, if the holding period extends to the fourth financial year, you get an additional benefit of one moreyear. For the same reason, do not sell your debt funds now. Wait till April 1 for the new financial year to begin to get the indexation benefit of more than one year.

Link Aadhaar Number To PAN Card

March 31 is also the deadline to link your PAN to your Aadhaar. If you haven’t already done so, do this right away. Not linking PAN to Aadhaar can have serious implications. Your PAN will become inoperative from April 1 and cannot be submitted or quoted for any transaction. Linking PAN to Aadhaar also makes online transactions and verifications easy.
The writer is managing director, MyMoneyMantra





Source link

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

[td_block_social_counter facebook="tagdiv" twitter="tagdivofficial" youtube="tagdiv" style="style8 td-social-boxed td-social-font-icons" tdc_css="eyJhbGwiOnsibWFyZ2luLWJvdHRvbSI6IjM4IiwiZGlzcGxheSI6IiJ9LCJwb3J0cmFpdCI6eyJtYXJnaW4tYm90dG9tIjoiMzAiLCJkaXNwbGF5IjoiIn0sInBvcnRyYWl0X21heF93aWR0aCI6MTAxOCwicG9ydHJhaXRfbWluX3dpZHRoIjo3Njh9" custom_title="Stay Connected" block_template_id="td_block_template_8" f_header_font_family="712" f_header_font_transform="uppercase" f_header_font_weight="500" f_header_font_size="17" border_color="#dd3333"]
- Advertisement -spot_img

Latest Articles