10 Smart Year-End Tax Moves to Make Before December 31, 2025

The final weeks of the financial year are still months away, but December 31st is a significant milestone from a tax planning perspective.

“Many tax-saving actions, especially those related to employer submissions, advance tax payments, and investment declarations, must be planned well before the year ends to avoid last-minute rush, cash-flow stress, and missed deductions,” says CA Ruchika Bhagat, MD, Neeraj Bhagat & Co.

Here are the smart year-end tax strategies every Indian taxpayer should focus on before 2025 closes:

1. Review Your Form 12BB & Submit Investment Proofs Early

Salaried employees are required to give Form 12BB to employers as proof of:

• Rent payments (HRA)

• Home loan interest

• Deductions under Section 80C, 80D, etc.

Submitting accurate details before year-end helps ensure:

• No excess TDS is deducted from your salary

• You don’t have to wait for refunds later

Tip: Gather rent receipts, insurance receipts, and loan certificates in December itself.

2. Maximise Section 80C Tax Savings

• Utilise the Rs 1,50,000 deduction fully by investing smartly in:

• ELSS funds (short lock-in + market-linked returns)

• PPF (Public Provident Fund)

• Tax-saving fixed deposits

• NSC

• Tuition fees for children

• Home loan principal repayment

• Life insurance premiums

“Invest early instead of delaying everything to March - spread payments to manage cash flow better,” advises Bhagat.

3. Don’t Forget the Extra Rs 50,000 Under NPS

If you invest in the National Pension System (NPS), you can claim an additional Rs 50,000 deduction under Section 80CCD(1B).

A powerful way to reduce tax + build retirement savings.

4. Check HRA Compliance

If you are claiming HRA exemption, ensure:

• Rent receipts are updated

• Rent agreement is in place

• Landlord PAN is available (if yearly rent > Rs 1 lakh)

Late submission may lead to tax getting deducted unnecessarily.

5. Health Insurance Tax Benefits (Section 80D)

Review whether premiums paid allow you full deductions:

Category Maximum Deduction

Self + Spouse + Children Rs 25,000

Parents (if senior citizen) Additional Rs 50,000

Preventive health check-ups within the above limit (Rs 5,000)

Year-end is a good time to get a preventive health check-up and claim the benefit.

6. Review Capital Gains & Use Available Exemptions

Before the year ends, check for:

• Long-Term Capital Gains (Rs 1 lakh exemption available)

• Booking losses to set off capital gains

• Investments in Section 54EC bonds if selling property

A timely tax harvest strategy can save significant taxes.

7. Pay Advance Tax (if applicable)

If your total tax liability exceeds Rs 10,000, you must pay advance tax by:

• March 15 – Final deadline

• December 15 – Avoid interest under Sections 234B & 234C

“Business owners, freelancers, and individuals with rental/ dividend/ capital gains income must review calculations right now,” says Bhagat.

8. Check Home Loan Tax Benefits

• Interest deduction up to Rs 2 lakh u/s 24(b)

• Additional deductions if eligible for affordable housing

Request interest certificate from bank/HFC to plan exact claims.

9. Charitable Donations for 80G Deduction

If you are planning donations, do it before December 31st and ensure:

• The organisation is registered under Section 80G

• You receive proper receipts with PAN & registration number

Digital payments are always better for documentation.

10. Align Tax Planning With Your Investment Goals

Instead of making rushed year-end payments:

• Automate SIPs in ELSS

• Review underperforming insurance policies

• Rebalance your portfolio annually

Smart planning today = lower taxes + better wealth growth

Final Takeaway

Year-end tax planning isn’t only about saving taxes - it’s about saving wisely while strengthening financial discipline.

“By organising proofs, reviewing investments, and planning before December 31, 2025, you ensure peace of mind during tax season… and more money in your pocket!” says Bhagat.