Taxpayers have already started planning investments for the next financial year as the current one ends on March 31, 2023. While future tax planning is important, ensuring some simple processes before the end of this month can also help individuals in saving tax.
As the financial year (FY 2022-23) comes to a close, taxpayers are running out of time to take advantage of tax deductions. It may be noted that individuals can save a lot of money by following some simple steps like making investments. To make the most of this opportunity, it is crucial to keep the following checklist in mind before the deadline:
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1. Firstly, taxpayers can claim a deduction of up to Rs 1,50,000 by investing in ELSS, PPF, NPS, EPF, tax-saving fixed deposits, and other instruments under section 80C.
2. Investing in the National Pension Scheme (NPS) is another smart way to save on taxes. Taxpayers can claim an additional deduction of Rs 50,000 in addition to the overall limit of Rs 1.5 lakhs under section 80C.
3. Taxpayers can claim a deduction of up to Rs. 25,000 against the health insurance premium paid for themselves, their spouses, and their dependent children. Additionally, taxpayers can claim an additional deduction of Rs 25,000 for their parents. Senior citizens can claim up to Rs. 50,000 for both categories.
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4. If taxpayers are considering purchasing an electric vehicle, they can claim a deduction of up to Rs 1,50,000 for the interest paid on the loan.
5. Lastly, taxpayers should consider paying their taxes in advance. If the tax liability, net of TDS, exceeds Rs 10,000, they are liable to pay the advance tax to avoid an interest penalty.
