Income Tax Tasks To Complete Before March 31: A Tax Expert Provides Guidance For ITR Season 2025
Income Tax: As FY25 is coming to an end, taxpayers need to finalise investments if opting for old tax regime, adjust TDS, pay advance tax, and optimise capital gains, among others, to better prepare for ITR season 2025 beginning April 1.
ITR Season 2025: As the financial year 2024-25 is coming to an end, the ITR season 2025 is set to begin from April 1. Though income tax return (ITR) filing for the AY 2025-26 will start after April 1, individuals and businesses must begin preparing for it and complete a number of tasks before FY25 ends on March 31.
Filing accurate returns is not only essential for compliance with tax laws but also for avoiding penalties and ensuring that all eligible deductions and exemptions are claimed. Whether the taxpayer is a salaried individual, business owner, or freelancer, there are several key aspects to consider before submitting your tax return.
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Suresh Surana, a Mumbai-based chartered accountant, highlights key tasks to complete before March 31:
1. Finalise Tax-Saving Investments
Before the financial year ends, it’s crucial for the taxpayers if they have opted for the old tax regime, to maximise eligible tax-saving investments under sections such as 80C, 80D, 80G, etc., can significantly reduce their taxable income. Some of the most common tax-saving instruments include:
Section 80C allows deductions of up to Rs. 1.5 lakh for investments made in options like PPF, ELSS mutual funds, life insurance premiums, principal repayment on housing loan, NSC, tuition fees, five year fixed deposits, etc.
Section 80D permits deductions of up to Rs 25,000 for premiums paid on health insurance policies for taxpayers, their spouse, children as well as parents (enhanced deduction of Rs 50,000 for senior citizens).
Section 80G covers deductions for donations made to charitable organisations.
Section 80CCD(1B) provides an additional deduction of up to Rs 50,000 on contribution to National Pension Scheme.
2. Submit Proof of Eligible Deductions to Employer
Salaried employees should ensure that they submit all proofs of eligible deductions to their employer before the financial year-end (March 31) or any internal cut-off date (as per companies policy) to ensure correct TDS calculations. Such documents may include:
Investment proofs for Section 80C (such as PPF, LIC, etc.)
Health insurance premiums for Section 80D
Interest certificates for repayments for home loan under Section 24(b)
By submitting these proofs in time, taxpayers can ensure that their employer adjusts the TDS appropriately and minimises the risk of additional tax liability at the time of filing.
3. Adjust TDS/Tax Deductions
If the taxpayers anticipate changes in their income, deductions, or exemptions towards the end of the financial year, it is important to inform the employer or other deductors to adjust the Tax Deducted at Source (TDS) accordingly. Proactively managing these adjustments can help ensure that the tax liabilities are accurately accounted for throughout the year.
4. Evaluate and Pay Advance Tax
If a taxpayer’s expected tax liability for the financial year exceeds Rs 10,000, he or she must pay the required advance tax by March 31. Timely payment of advance tax will help avoid interest penalties under Section 234B or Section 234C for non-payment or underpayment of advance tax.
5 Optimise Capital Gains Taxation
For taxpayers with investments in stocks, mutual funds, or real estate, it is important to review capital gains for the year and ensure that any capital gains are accurately accounted for and explore opportunities to carry forward any capital losses to offset future gains.
Additionally, taxpayers may consider permissible tax-loss harvesting strategy, wherein they can sell investments at a loss to offset gains, thereby reducing the overall taxable income. This strategic review can help optimise your tax position.
6 Check and Reconcile Form 26AS/ AIS/ TIS
Before the financial year ends, taxpayers should ensure that their Form 26AS (tax credit statement)/ annual information statement (AIS) / tax information statement (TIS) is updated with all the TDS deductions, advance tax payments, and self-assessment tax payments (till date) for the year. Taxpayers should verify that the TDS deducted by the employer and other deductors matches the details as maintained by them in Form 26AS/ AIS/ TIS. If there are any discrepancies, taxpayers need to raise them with the concerned parties well before the year ends to correct them before filing your return.
“As the financial year nears its end, taking proactive steps can significantly ease the process of filing the Income Tax Return (ITR). By reviewing and finalizing tax-saving investments, contributing to retirement funds, prepaying premiums, and ensuring that TDS and other taxes are adjusted properly, taxpayers can minimise their taxable income and avoid unnecessary tax burdens. Early planning allows you to take full advantage of eligible deductions and exemptions, leading to a smoother and more efficient ITR filing process when the time comes," Surana added.
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