Income Tax: If you are planning to opt for old tax regime at the time of filing your income tax return (ITR) in July this year for FY 2024-25, it is important to remember that the last date to invest in tax-saving instruments is March 31 i.e., Monday.
If you also intend to file your tax return under the old regime, it is vital to make note of following points.
Investment options: There are multiple tax-saving investment options available for taxpayers. These include PPF (Public Provident Fund), NSC (National Savings Certificate), NPS (National Pension System), SSY (Sukanya Samridhi Yojana) and KVP (Kisan Vikas Patra).
“Taxpayers who want to opt for old tax regime in Financial Year 2024-25, 31st March is your last chance to optimise your tax deductions,” says CA Pratibha Goyal, partner, PD Gupta & Co., a Delhi-based CA firm.
Tax saving options: These are some of the schemes
PPF (Public Provident Fund): One can invest anywhere between ₹500 to ₹1.5 lakh in this scheme. Interest offered on this scheme is 7.1 percent per annum.
NSC (National Savings Certificate): One can invest any amount which is equal to or more than ₹1,000. Interest offered on this scheme is 7.7 percent per annum.
SSY (Sukanya Samridhi Yojana): One can invest anywhere between ₹250 to ₹1.5 lakh in a financial year. Interest offered on this scheme is 8.2 percent per annum.
KVP (Kisan Vikas Patra): One can invest a minimum of ₹1,000, while there is no maximum limit. Interest offered on this scheme is 7.5 percent per annum.
SCSS (Senior Citizens Savings Scheme): One can invest anywhere between ₹one thousand to ₹30 lakh in a financial year. Interest offered on the scheme is 8.2 percent per annum.
5-year National Savings Time Deposit: The scheme offers 7.5 percent per annum. There is no maximum limit to invest in this scheme while the maximum deduction which one can claim is ₹1.5 lakh in a financial year.
Old tax regime
Another key point worth remembering is that these deductions are allowed only under old tax regime. If you are planning to file your tax return under the new tax regime (also the default regime), then you are not entitled to claim any of these deductions.
There are only a few deductions that are allowed in the new tax regime. These are as follows:
I. Deduction under 80CCD(2): This is given for contribution made by the employer towards the National Pension System (NPS).
II. Deduction under 80CCH: This scheme is given for the income earned via Agnipath scheme.
III. Deduction under section 80JJAA: This is meant for employers (and not individuals) to claim a 30 per cent deduction on additional employee recruitment costs for three consecutive assessment years.
Meanwhile, experts believe that taxpayers should plan their investment during the year and not wait for the end of the year to proceed.
“Tax savings should be planned during the entire year. One should not do it on the last day of March,” says CA Chirag Chauhan, who runs a CA firm in Mumbai.
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