As we enter the last month of the existing 2021-22 fiscal year. Ideally, your tax planning should start in the first month of the fiscal year in April. You must do whatever is necessary to save tax for the year ending March. Thus, March becomes very important for tax planning. In addition to this, from the last day of filing late tax returns to binding your PAN-Aadhaar, March also has other crucial deadlines for your financial matters. Here are some key deadlines that may affect your finances this month.
Last month for tax planning
This is the last chance for taxpayers to maximize tax benefits under various sections. Although aware of this deadline, most investors postpone their tax planning until the last minute. If you haven’t planned your tax investments until now, do it early and avoid common investment mistakes.
Deadline for filing late declarations
The Income Tax Return (ITR) filing deadline for Fiscal Year (AF) 2020-21 or Assessment Year (AY) 2021-21 ended on December 31, 2021. But you can still file a late return by March 31, 2022 However, for filing a late return, you may have to pay a penalty and additional interest on taxes. Also, there are some limitations of a late return. Read on to understand.
A late return is a return that is filed after the stipulated due date mentioned in the income tax rules. A late tax return incurs a late filing fee under Section 234F of the Income Tax (IT) Act of Rs 1,000 if the total gross taxable income during the financial year does not exceed Rs 5 lakh; or Rs 5,000 otherwise.
The last date to link your Permanent Account Number (PAN) to their Aadhaar card before March 31, 2022. If not done within the specified time, the PAN card may become invalid and a charge of Rs 1,000 may be incurred required to bind the PAN card. with Aadhaar afterwards. 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 others, as providing a PAN card in all these cases is a must.
You can link them through the e-filing website, by texting 567678 or 56161 and typing in UIDPAN or do it offline through the National Securities Depository Limited (NSDL) and UTIITSL PAN service centers.
KYC update in your bank accounts
Customers are required to complete the KYC update 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 outbreak of the Omnicron variant of the coronavirus in the country.
Customers must go to their bank branch 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 the periodic updating of clients’ KYC details. This includes video-KYC and electronic document submission via digi-locker to financial institutions for verification.
Some of the major banks, such as the State Bank of India (SBI), also allow customers to submit their documents to update their KYC information, via email or post. If the client misses the last KYC update date, the bank will freeze the account.
The deadline for filing the withholding tax is approaching. Anyone whose estimated tax liability for the year is Rs 10,000 or more is required to pay a tax advance. The withholding tax must be paid in four instalments during the fiscal year itself. The deadline for payment of the fourth installment of withholding tax is March 15, 2022.
This applies to all taxpayers, employees, self-employed and businesses. However, a resident senior (natural person aged 60 or over), with no business or professional income, is not liable for withholding tax. A salaried person, who has no income other than salary, does not have to pay installments, as employers are required to deduct the applicable tax from the monthly salary and remit it to the ministry. Failure to pay the correct withholding tax on time or underpayment of tax results in penal interest.
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