ITR-U, Deductions And Avoiding Penalties: Here Are 10 Key Tax Tips To Check Off Your List Before March 31 Deadline

The financial year is wrapping up this March 31 before the beginning of a new one, and taxpayers have an important to-do list. This is to ensure that they do not land in trouble with the tax authorities.

You might wonder what is this ‘to-do list’ we are talking about. These are basically the key tax and tax-saving investment steps that you should know about before the calendar wraps up this financial year. From filing updated returns to making last-minute tax-saving investments, the clock is ticking.

Missing such a deadline could mean penalties, lost deductions and unnecessary financial stress for you.

Says CA (Dr) Suresh Surana, “In the final quarter of the tax year, a comprehensive review of investments, submission of tax-saving proofs to employers, and timely payment of advance tax (if applicable) should be completed. This proactive approach ensures tax efficiency while minimizing financial and compliance burdens.”

So let’s understand the key steps you should take before the time runs out:

1) Check Your Tax Liability

First and foremost, you must take a moment to assess how much tax you owe for the financial year 2014-25. This is important because many people may leave this check for when they file their returns in July, but by then, there’s little they can do to reduce their tax outgo.

If you are under the old tax regime (OTR), there may still be opportunities to lower tax liability by making some key investments before March 31.

2) Tax Saving Investments To Think About

As noted in the point above, if you have opted for OTR, March 31 is your deadline to optimise on tax saving instruments which can be claimed as deductions. Here are some key deductions you can avail of:

Section 80C: Investments in Public Provident Fund (PPF), Equity-Linked Savings Schemes (ELSS), and other eligible instruments.

Section 80D: Premiums paid for health insurance.

Section 80G: Donations to eligible charitable organizations

However, it is important to note that people who have opted for the New Tax Regime (NTR) will not benefit from these deductions, so this step only applies if you have opted for the old system.

3) File Updated Return (ITR-U)

For those who have made a mistake in their income tax return for FY 2021-22 (assessment year 2022-23) this is an important point. The tax department will allow you to correct the incorrect filings ITR-U by March 31, 2025. Whether you missed declaring an income source or filed under the wrong category, this is your last chance to fix errors and avoid scrutiny from the tax department.

4) Pay Advance Tax (If you’ve missed it)

Salaried individuals who earned extra income (such as from freelancing or rent) but have not paid advance tax by March 15 can still act. Some employers may accept your request to deduct extra tax from your March 15 salary to cover this shortfall. If that is not an option, paying advance tax directly before March 31 can help avoid interest charges under Section 234B and 234C.

5) Pay Property Tax (if applicable)

For the home or property owners this bit is significant - make sure you have cleared your property tax dues for FY 2024-25 by March 31. This payment can be claimed as a deduction when calculating income from house property, so it’s worth checking off your list.

6) Investing in Mahila Samman Savings Certificate (MSSC)

Women who are looking for a safe investment option with guaranteed returns should take note of this. The government announced the Mahila Samman Savings Certificate (MSSC) scheme in Budget 2023-24 as a one-time scheme available for two years (from April 2023 to March 2025).

It offers an attractive 7.5 per cent interest for two years and is backed by the government. While other banks may offer higher returns, this scheme is a good choice for those who want security over high returns.

This small saving scheme closes on March 31, so bag it before it closes but only if it aligns with your financial plans.

7) Renew Health Insurance (for deduction purposes)

Though health and life insurance are key instruments for financial security it cannot be negated that they are used by many people as tax saving instruments as well. If your health insurance renewal date falls in March or if you have not paid a pending premium for FY 2024-25, do it before March 31.

The deduction for health insurance is claimed under Section 80D. Missing the deadline to renew while you still have time could mean losing out on this benefit.

However, it is even more important to note this: Failing to renew can also result in a lapse of your health coverage, leaving you uninsured in case of medical emergencies.

8) Submit Challan-Cum-Statements for February TDS

If you deducted tax in February under any of the following sections, make sure the challan-cum-statement is submitted by March 30:

Section 194M: TDS on payments to professionals or contractors

Section 194-IA: TDS on property sales

Section 194-IB: TDS on rent

Late submissions could result in penalties and interests, so it’s important to not let this deadline slip.

9) Foreign Income Disclosure and Claiming Foreign Tax Credit

This is significant for those individuals who are earning abroad or pay taxes overseas - March 31 is the deadline to submit Form 67, which reports foreign income and tax paid.

If you fail to do this on time, there is a chance you might lose the ability to claim a foreign tax credit which could lead to double taxation on the same income.

10. Know Special Fixed Deposits

Some banks have introduced special fixed deposit schemes that would end on March 31, 2025. If you are looking for a safe place to park your money and still gain returns on the same, consider these before they expire.

However, make sure you compare interest rates with other available options before locking in FDs. This will ensure that you get the best deal available.

The last few days of the tax year are important to check compliance and ensure you are maximising your savings. A little effort now can prevent penalties later, reduce tax liability, and help secure financial benefits. 

Whether it is about making last-minute investments, updating returns or settling outdated dues, these steps will help you lock in a tax season which is smooth and stress-free for you.

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