With the end of March 31, the tax filing process  has finally come to an end as well. Things are over for one more financial year, but in order to have a hassle free tax planning the next year, you need to take lessons from the mistakes made in the tax planning this year.

For example, last minute investment decisions can lead to mistakes. May be you can end up buying a too expensive product which was never required.

Most importantly, it becomes a very big financial stress if the entire investment process has to be completed within a couple of months. Let’s understand this with a few numbers. An individual can take advantage of the following benefits to save his taxes:  relief of Rs 1 lakh under Section 80C, relief of Rs 20,000 under Section 80CCF, relief of Rs 15,000 (Premium) for medical insurance (self) and relief of Rs 20,000 (Premium) for dependent (parents).

There are a host of other tax benefits that one can take advantage of, but only after proper planning. If one starts making all these investments at the end of the year, the number will shoot up to over Rs 2 lakh.

Therefore April 1 should always be the day to begin investment planning. You can make a fresh beginning by simply creating a proper calendar of investments to be made during the year. This helps a lot as the salaried will soon have to submit details of proposed investments to their organizations. If you will have a clear plan it will be easier for you to give the correct details which ultimately will lead to the right adjustments in your salary.

Let’s take an example, under Section 80C if you plan to invest Rs 50, 000 in Public Provident Fund PPF, Rs 40,000 in equity-linked saving schemes (ELSS) and another Rs 30,000 in life insurance premiums or five-year fixed deposits, then prepare a proper chart and follow it.

Starting early also helps an individual get better return. You should rather invest the entire Rs 50,000 before April 5 in order to seek maximum interest on your PPF money. This will benefit you with the entire 8 percent of interest for 12 months on the invested amount as well as the existing corpus.

Some of the instruments like National Savings Certificates calculate the interest half-yearly. In this way an investor earns slightly more than the existing rate of 8 per cent (8.16 per cent).

If you purchase a medical insurance family floater at the beginning of the financial year, it will give your family cover for the entire year.

Apart from investments you can also start some simple things that will help you save money. For example, filing bank statements properly. For self-employed, maintaining details of expenses is important. It is always advisable to create a regular reminder for payments. This will help save a lot of money on extra charges and penalties that one keeps forking out because of sheer laziness or forgetfulness.

The financial year ends in India on March 31. This date holds great significance as the income of the period April 1 to March 31 is considered as a person’s income for the financial year for which he has to pay Income Tax.

Salaried employees are expected to submit all the necessary proofs to their employer so that they can consider and compute the balance taxes to be deducted from their salary.

While people who generate income through business or who are self-employed will need to estimate the amount of income till March 31, so that necessary advance taxes can be deposited into the government treasury.

TaxSavers.in brings to you ten basic points an individual needs to keep in his mind before filing his income tax return.

1. Submission of the investment proofs: In order to claim benefits under the tax deduction schemes, you need to submit the proof of investments to your employer. A variety of investments  under section 80C of the Indian Income Tax Act offer tax rebate, for example:

• Insurance
• Investments in equity-linked savings schemes (ELSS)
• Deposits in public provident fund (PPF) account
• Purchase of National savings certificates (NSC)
• Education fees for higher studies.

Every employer needs the details and documentary proof of the investments made by his employee in order to provide him the deduction under Section 80C of the Income Tax Act. An individual can claim for a deduction of up to Rs. 100000 in a financial year.

2. Home Loan (submission of the principal and interest repayments certificates): If you are paying interest for home loan, then you can claim tax deduction. All you need to do is to collect the appropriate principal and interest repayment certificate from the lender for the amount paid during that financial year. The person also has to provide a computation to his employer specifying the income/loss under the head ‘House Property’ along with the proof of interest and principal repayment, to claim the deduction.

3. House Rent Allowance and Travel receipts: Tax deduction can also be claimed if you submit house rent allowance proofs or travel receipts. The necessary receipts under this category include; rent receipts, lease papers etc.

4. TDS certificates: TDS are tax deducted at source. In order to claim for tax deduction, you will have to collect all your TDS certificates from banks and his previous employer well in advance.

5. Health insurance premium: Even if you are paying premiums for health insurance, you can claim tax rebates. However, for this you must have the receipt for the premium paid. You can claim for the following deductions under Section 80C:

• Rs. 15,000 on premium paid for insurance on the health of the assessee and his family.
• In case the insured is a senior citizen, the above mentioned limit will go up to Rs 20,000.

6. Donations: Under Section 80 G of the Indian Income Tax, you can claim for tax deductions if you have donated money to any recognized charitable organization across the country. There are many charitable organizations which are recognized under Section 80G. However, you will be required to produce the receipt for the donation amount while claiming for tax deduction.

7. Medical, telephone and other bills: If a particular employer is offering his employees any reimbursements towards telephone or medical expenses, then he will have to submit the receipts for all such miscellaneous bills to his employer.

8. Education Loans: In case you are paying interest on education loan then you can claim for tax benefits. But you have to make sure that you have all the necessary records to authenticate your claim.

9. Capital gains: In case if you have sold or transferred any capital asset like house property, shares, mutual funds etc during that financial year, then you have to compute capital gains/losses on these transactions. There are different rates for long-term and short-term capital gains. Your taxability will be determined only after the classification and the type of the asset.

10. Compute the taxable income and Income tax to be paid: Once you are through with the calculation of your investments done, you should start computing your tax for the year and determine if you are liable to pay any tax or not.