6 Important Finance-related Tasks That You Need to Complete by March 2022

From a finance perspective, March is an important month as it signifies the end of a financial year and contains several filing and investment-related deadlines. Post-March, you may lose the opportunity to make tax-saving investments for FY 2021-22, and you could be met with penalties for missed deadlines. To avoid this, you need to ensure that these six important finance-related tasks are completed this month.

1. Complete your PAN-Aadhaar linking

The last date to link your PAN with your Aadhaar is 31st March 2022. After the deadline, PAN cards that are not linked to Aadhaar will be declared inoperative, and the PAN holder will not be allowed to make any financial transactions. Quoting the PAN is mandatory for opening bank accounts, buying shares or mutual funds, etc. Further, most financial institutions ask customers for their PAN for KYC purposes. If the PAN is inactive, the respective account could be impacted.

Please note that a penalty of Rs 10,000 may also apply under Section 272B of the Income Tax Act for failure to link the two documents before the deadline. It would be assumed that the PAN has not been furnished as required by law. PAN-Aadhaar can be done through the e-filing website or by sending an SMS to 567678 or 56161 by typing UIDPAN<12 digit Aadhaar><10 digit PAN>. There is also an option to do it offline through the various PAN services centres of the National Securities Depository Limited (NSDL) and UTIITSL.

2. File a belated or revised income tax return

The deadline for income tax return (ITR) filing for FY 2020-21 was 31st December 2021. However, taxpayers can still file a belated return by 31st March 2022. Also, taxpayers who have detected a mistake post-filing their income tax return can file a revised return by 31st March 2022. 

The penalty for late filing/belated filing of an income tax return could be up to Rs.10,000 under Section 234F of the Income Tax Act. For taxpayers with a total income of less than Rs.5 lakh in the financial year, the maximum penalty for late filing is Rs 1,000.

3. Make tax-saving investments

March is the last month to make tax-saving investments for the financial year 2021-22 to reduce your overall tax burden. This includes investments like PPF, tax-saving fixed deposits, NSC, etc. Also, if you fail to deposit the minimum amount in your PPF account for the financial year, you could risk your account becoming dormant.

An important point to note here is that your tax-saving investments should align with your overall investment strategy, i.e. it should maximise your wealth and not just be to save tax. 

4. Pay your last advance tax instalment  

Taxpayers in India having an estimated tax liability of at least Rs.10,000 in a financial year must pay advance tax. Advance tax is to be paid in four instalments during a financial year, and 15th March 2022 is the deadline to pay the fourth and final instalment for FY 2021-22. Failure to pay advance tax on time or short payment of advance tax attracts penal interest under the income tax law.

Advance tax is to be paid by all taxpayers, except resident senior citizens who do not have income from business or profession, and salaried persons who do not have income other than salary. In the case of salaried employees, it is the responsibility of the employer to deduct and remit the applicable taxes from the employee’s salary. However, other earnings by salaried individuals, such as interest, capital gains, rent, etc., will attract advance tax.

5. Update your KYC details in your bank accounts

The Reserve Bank of India (RBI) had extended the deadline for updating Know Your Customer (KYC) details in bank accounts to 31st March 2022. If your KYC details have not been updated in your respective bank(s), then you will need to visit your bank with a set of self-attested documents, such as proof of identity and proof of address. Some banks also allow customers to submit their documents via post or email. Failure to update KYC details before the deadline could lead to the bank account getting frozen.

6. Avail of the PMAY subsidy benefit

Pradhan Mantri Awas Yojana (PMAY) is a government initiative that provides affordable housing to the Low Income Group (LIG)/Economically Weaker Section (EWS) segments. Beneficiaries can avail of 20-year loans at 6.5% per annum. The PMAY program was implemented in 2015 and comprised three phases. The first two phases have already concluded, and the final phase will end on 31st March 2022. Hence, the last date to avail the PMAY credit-linked subsidy scheme (CLSS) benefits for LIG and EWS  categories is 31st March 2022.

For any clarifications/feedback on the topic, please contact the writer at athena.rebello@cleartax.in