As we enter the last month of the existing financial year 2021-22. Ideally, your tax planning should start from the first month of the financial year in April. You must do whatever is needed to save on tax for the year ending in March. So, March becomes very important for tax planning. Besides these, from last day of filing belated income-tax returns to linking your PAN-Aadhaar, the month of March has some other crucial deadlines for your money matters as well. Here are some key deadlines that are likely to affect your finances this month.
Last Month for Tax Planning
It is the last chance for taxpayers 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.
Last Date for Filing Belated Returns
The deadline for filing the income tax return (ITR) for the Financial Year (FY) 2020-21 or Assessment Year (AY) 2021-21 ended on December 31, 2021. But you can still file a belated return till March 31, 2022. However, to file a belated return, you may have to pay a penalty and additional interest on taxes. Besides, there are a few limitations of a belated return. Read more to understand.
A belated return is a return which is filed after the stipulated due date mentioned in the income tax rules. 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.
PAN-Aadhar Linking
The last date to link your Permanent Account Number (PAN) with their Aadhaar card by March 31, 2022. If not done by the given deadline, the PAN card can become invalid and a fee of Rs 1,000 may be required for linking the PAN card with Aadhaar thereafter. If the PAN card is not linked to Aadhaar, an individual will also not be able to invest in mutual funds, stocks or open a bank account among other things as furnishing a PAN card in all those cases is a must.
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.
KYC Update in your Bank Accounts
Coustomers are requiered to complete updating KYC by March 31, 2022. The Reserve Bank of India (RBI) had extended the deadline for KYC in bank accounts till March 31, 2022, from the previous deadline of December 31, 2021. The deadline has been extended again due to the surge in the Omnicron variant of the coronavirus in the country.
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.
Advance Tax Installment
The deadline for filing advance tax is approaching. Any person whose estimated tax liability for the year is Rs 10,000 or more is required to pay advance tax. The advance tax has to be paid in four instalments in the financial year itself. The last date for paying the fourth instalment of advance tax is March 15, 2022.
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.
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