10/03/2016 8:13 AM IST | Updated 15/07/2016 8:26 AM IST

7 Must-Dos To Save Taxes Before The Financial Year Ends

Crawling Through Tax Fence Hole
Vasily Kafanov via Getty Images
Crawling Through Tax Fence Hole

It is time to say goodbye to financial year 2015-16! Did something keep you from planning your taxes this year? Don't worry. There are still a couple of weeks to make the most of tax saving for this year. Here's a list of seven essential to-dos.

1. Get health insurance cover for your family

You can buy a health insurance policy for your family and get tax benefits. Section 80D tax benefits can be claimed when you buy an insurance cover for yourself, your spouse and kids. A maximum of ₹25,000 can be claimed. If you want to insure your parents, you can claim an additional ₹30,000 for them. You can claim the medical expenses of uninsured parents older than 80 years of age in your tax return under 80D.

2. Get a health check-up done before 31 March

If you have been ignoring your health (along with the income tax!), now is the time to do something about both. If you have not exhausted your 80D deduction limit, you can claim ₹5,000 for preventive health check-ups.

3. Invest in PPF account

PPF or Public Provident Fund allows an investment of a maximum of ₹1,50,000 in one financial year. If you have an existing PPF account do remember to deposit for this year; a minimum of Rs 500 must be invested each year.

PPF is a good way to save for your sunset years and the government has said it will keep PPF completely exempt from tax. Deposits earn you a deduction under section 80C.

4. Pay your LIC premium

Have you paid this year's premium on your LIC policy? It's important to pay timely premiums to keep your policy in force or else you may stand to lose policy benefits. These premiums can also be claimed as a deduction under section 80C.

5. Invest in an Equity Linked Savings Scheme (ELSS)

Do you wish there was a way to make money from the stock markets? If you can't find the time to pick the right stocks, ELSS is what you should do. Such schemes allow you to add equity to your portfolio without the pains involved. These schemes are managed by fund houses. They invest in equities and give you units of the total fund. ELSS has a lock-in period of three years. When you sell after three years your gains are exempt from tax. You can stay invested for a longer period if you wish. Investments in ELSS also come with tax benefits as these can be claimed under section 80C.

6. Pay your tax dues

Though your income tax return for financial year will be filed much later, your taxes must be paid before the year ends. If advance tax rules apply to you, make sure you pay your last instalment in time; i.e. by 15 March. Senior citizens who do not earn business income don't have to pay advance tax, and can pay their dues while filing their tax return. But for those below 60 years, unpaid taxes at the time of filing return have to be paid with penal interest under Section 234B and 234C. Sometimes, interest income can bump up your total income and show up a tax due--do pay it before the year ends.

7. Prepare to claim HRA deduction

Do you live on rent and receive HRA from your employer? If you could not submit relevant proofs to your employer, don't fret. HRA exemption can be claimed directly in your tax return. You must have a proper lease agreement in place and also have rent receipts from the landlord. You will need the landlord's PAN if your rental payment exceeds ₹1,00,000 in the financial year. You don't have to submit these documents anywhere. Just keep them safely in your records should the assessing officer ask for them later.

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