Complete These Key Tasks Before Financial Year Ends to Save Tax and Avoid Penalties
With the financial year 2025-26 nearing its end, taxpayers should complete a few important financial tasks before March 31, 2026. Taking timely action can help reduce your tax burden and prevent unnecessary penalties. From making tax-saving investments to submitting proof to your employer, these steps are essential for smooth tax planning.
1. Make Tax-Saving Investments Under Section 80C
Taxpayers who opt for the old tax regime can claim deductions under Section 80C of the Income Tax Act, 1961. Popular options include Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), and National Savings Certificate (NSC). Investing in these schemes before the financial year ends allows you to claim deductions and also helps keep these accounts active with the required minimum deposit.
2. Submit Investment Proof to Your Employer
Employees who declared tax-saving investments at the start of the year must submit proof of those investments to their employer before March 31. If you fail to provide the documents, your employer may deduct a higher TDS (Tax Deducted at Source) from your salary.
3. Pay Advance Tax on Time
The deadline for paying the final instalment of advance tax is March 15, 2026. Taxpayers whose total tax liability exceeds ₹10,000 in a financial year must pay advance tax. Missing the deadline could lead to additional interest and penalties.
4. Claim Health Insurance Deduction Under Section 80D
Premiums paid for health insurance can reduce your taxable income under Section 80D. You can claim up to ₹25,000 for yourself and your family. For senior citizens (above 60 years), the deduction can go up to ₹50,000, and you can claim up to ₹75,000 if you include your parents’ policy as well.
5. Correct Mistakes Using ITR-U
If you missed claiming a deduction or made an error in your earlier return, you still have a chance to fix it through ITR-U. This updated return option allows taxpayers to correct past mistakes and declare additional income if required.
6. Claim Home Loan Interest Deduction
Home loan borrowers can claim deductions under Section 24(b) of the Income Tax Act, 1961. This provision allows a tax deduction of up to ₹2 lakh per year on interest paid on a home loan, making home ownership more financially manageable.
Completing these financial tasks before March 31, 2026 can help you maximise tax benefits, stay compliant with tax rules, and avoid penalties. Proper planning at the end of the financial year can make a big difference to your overall tax savings.
1. Make Tax-Saving Investments Under Section 80C
Taxpayers who opt for the old tax regime can claim deductions under Section 80C of the Income Tax Act, 1961. Popular options include Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), and National Savings Certificate (NSC). Investing in these schemes before the financial year ends allows you to claim deductions and also helps keep these accounts active with the required minimum deposit. 2. Submit Investment Proof to Your Employer
Employees who declared tax-saving investments at the start of the year must submit proof of those investments to their employer before March 31. If you fail to provide the documents, your employer may deduct a higher TDS (Tax Deducted at Source) from your salary.3. Pay Advance Tax on Time
The deadline for paying the final instalment of advance tax is March 15, 2026. Taxpayers whose total tax liability exceeds ₹10,000 in a financial year must pay advance tax. Missing the deadline could lead to additional interest and penalties. 4. Claim Health Insurance Deduction Under Section 80D
Premiums paid for health insurance can reduce your taxable income under Section 80D. You can claim up to ₹25,000 for yourself and your family. For senior citizens (above 60 years), the deduction can go up to ₹50,000, and you can claim up to ₹75,000 if you include your parents’ policy as well.5. Correct Mistakes Using ITR-U
If you missed claiming a deduction or made an error in your earlier return, you still have a chance to fix it through ITR-U. This updated return option allows taxpayers to correct past mistakes and declare additional income if required. 6. Claim Home Loan Interest Deduction
Home loan borrowers can claim deductions under Section 24(b) of the Income Tax Act, 1961. This provision allows a tax deduction of up to ₹2 lakh per year on interest paid on a home loan, making home ownership more financially manageable. Completing these financial tasks before March 31, 2026 can help you maximise tax benefits, stay compliant with tax rules, and avoid penalties. Proper planning at the end of the financial year can make a big difference to your overall tax savings.
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