Five things you could do before March 31 to save on income tax

Gautam Adani's wealth fell over 60%

In NEW DELHI: It is important to ensure you have maximised the tax benefits available to you as the fiscal year comes to a conclusion. Several actions can help lower your taxes in addition to using the Section 80C deductions. Here are some wise tax decisions you should make in the coming days.
Create an account with the National Pension System

Open A National Pension System Account
The majority of taxpayers would have already used up their Section 80C tax savings cap of Rs 1.5 lakh. Nevertheless, do you additionally take advantage of the additional Rs 50,000 National Pension System (NPS) contribution deduction allowed under Sec. 80CCD(1b)? To save extra tax this year, open an NPS account right away. You can avoid paying tax on up to Rs 15,600 if you are in the 30% bracket. It only takes ten to fifteen minutes to register an NPS account online if your PAN and Aadhaar are linked. To open an account, visit the NPS website at enps. nsdl. com and follow the directions.

Capital Gains And Losses Harvesting
The previous two years have seen a lot of volatility in the stock market. It’s time to book them by March 31 whether you’ve made gains or losses. Tax-free long-term capital gains are those up to Rs. 1 lakh. Selling some profitable mutual funds and stocks makes sense in order to earn tax-free gains of up to Rs 1 lakh. The following day, you can purchase them back.

It’s time to book your losses if your stock market luck has been bad. You can offset these losses with profits from other assets. Only long-term capital gains can offset long-term capital losses. Yet, short- or long-term capital gains may be used to offset short-term capital losses. Moreover, unadjusted losses may be carried over for a maximum of eight fiscal years.

Purchase life insurance to receive a tax benefit
One of the key factors for life insurance’s popularity with investors is the tax-free return. However, the Government Budget for this year proposes taxing life insurance policy maturity proceeds if the total yearly premium paid surpasses Rs 5 lakh. If approved, insurance policies purchased on or after April 1, 2023, will be subject to taxation. If you want to take advantage of the tax break, get a life insurance policy by March 31.

Invest in Debt Funds to Profit from Double Indexation

There are signs that the interest rate cycle is shifting after the central bank consistently raised rates. Debt funds will generate positive returns if interest rates decline or even remain unchanged. Yet, there is another justification for investing in debt funds and other non-equity projects before March 31 or earlier. If the investment is kept for at least three years, the indexation advantage becomes available. But, you receive an additional advantage of one more year if the holding period continues into the fourth financial year. Do not sell your debt funds at this time for the same reason. To receive the indexation benefit of more than one year, wait until April 1 for the start of the new fiscal year.

Connect PAN Card To Aadhaar Number

The deadline for linking your PAN to your Aadhaar is March 31. Do this right now if you haven’t already. Neglecting to link PAN to Aadhaar could have detrimental effects. From April 1, your PAN will no longer be valid and cannot be filed or quoted for any transactions. Online transactions and verifications are also made simple by linking PAN to Aadhaar.