What can you do before year end? – Check list for the year end.

By | February 9, 2016

www.incometaxtips.inIt’s a time to gear up and get ready for the year end necessities with respect to finalization of accounts and income tax related requirements. As we all know March ending is approaching very fast and this is the best time to get your accounts in order and plan for processing of year end. This article will help you to prepare your check list for the year end requirements.

Here are top 12 items of check list

  1. Prepare the list of all the eligible investments that must have done thru out the year and are deductible under section 80C of the income tax act. Once you are ready then you can analyze the list and come up with deficit if any in the investments and then you have chance to true up the investments. As per section 80C the maximum amount of eligible deduction is Rs. 1.5L and below is the inclusive list of eligible investments;
    1. Life insurance policy premium
    2. Contribution towards public provident fund, statutory provident fund or recognize provident fund
    3. Contribution towards National Saving Certificate VIII & IX issue and deposit in Sukanya Samruddhi Account
    4. Contribution towards Unit Linked Insurance Plan
    5. Contribution towards notified pension fund
    6. Repayment towards principle amount of housing loan
    7. Tuition fees paid to any university/college/educational institute in india
    8. Amount of deposit for a period of 5 years with schedule, national bank or post office under tax saving scheme
    9. Stamp duty, registration and other expenses for the purpose of transfer of property to the tax payer
  1. Login to your income tax account at http://incometaxindiaefiling.gov.in/ and verify the form 26AS (tax credit statement) against the tax credit certificates you have like form 16 or form 16A. If you see any discrepancies in the tax credit then get in touch with deductor and rectify the same in advance before it’s too late. If you don’t take the proper care of the tax credit statement i.e. form 26AS then the correct and true credit will not be given to you and you will receive a demand notice. It is very important to have form 26AS matching with all the tax credit certificates.
  1. Prepare the statement showing the gains or losses on share market transactions. Your statement must show the details of traded script, contract notes #, purchase quantity, purchase date, purchase amount, sold date, sold quantity, sales consideration. This statement will help you to separate out the gains as short term or long term.
  1. If you have made any donations for which the deduction is allowable under section 80G during the previous year then make sure you have all the donations receipts with you. If you do not possess any then get in touch with such institute and ask them to issue the duplicate receipt in absence of original.
  1. In case you have made any payment in respect of Mediclaim policy then make sure you hold the required certificate under section 80D for the purpose of claiming the deduction.
  1. In case you have incurred any expenditure for maintenance including medical treatment of any handicapped dependent as per section 80DD who is person with disability, then the deduction of Rs. 75,000 Is allowed irrespective of actual amount of expenditure. A higher deduction of Rs. 1.25L is allowed in case the person having severe disability having disability of 80% or more.
  1. In case you have incurred any expenditure in respect of medical treatment for specified disease or aliment as prescribed by CBDT then the deduction for minimum of Rs. 40,000/- or actual spend is allowed under section 80DDB.
  1. Repayment of towards the interest component of education loan. The amount of repayment on account of education loan is allowed as deduction under section 80E on satisfaction of conditions specified under section 80E.
  1. Deduction in respect of rent paid under section 80GG. Any person who is paying the house rent and who is not in receipt of house rent allowances can claim the deduction under section 80GG. The amount of deduction will be lease of the following
    1. 2000 per month
    2. 25% of total income
    3. Amount in access of actual rent in excess of 10% of total income
  1. Make sure you have all the statements/passbook of your bank accounts & credit cards. Also be ready along with interest certificates for your fixed deposits etc.
  1. Don’t forget to cover the income to be clubbed under section 64.
  1. For small or medium scale business,
    1. Review and tidy the sales ledger amount with all your statutory returns submitted by you with respective authorities.
    2. Review and tidy the sales ledger amount with all your statutory returns submitted by you with respective authorities.
    3. Prepare the bank reconciliation statement. Review this report for any unmatched items that you would not expect to be outstanding, for example, any un-cleared direct debits or old cheques – these may be the result of a duplicate entry. Adjust these as required and re-print the final unmatched report.
    4. Review the stock and WIP reports.
    5. Review the wages/Salary registers.
    6. Make sure you are in possession of all the receipts/bills of expenses you have made for the purpose of business
    7. Make sure you are in possession of all the bills for the purchase of business assets for purpose of claiming of depreciation and other allowable deductions

Based on the above facts prepare the estimated statement of total income and if you have any tax liability due, then pay the tax due before 15th March to avoid the interest liability


2 thoughts on “What can you do before year end? – Check list for the year end.

  1. Vijay Gupta

    I am a Government Employee. I bought a flat from Loan and still possession of Flat is not taken by me as it is a construction linked plan and the builder will complete it in within three years.

    No my query is that my i claim rebate in Income Tax of the interest amount which Bank is charging from me Monthly.

    If i can then under which section of the Income tax rules.

    Kindly help me.

    1. TaxGuru Post author

      Interest on home loan is eligible for deduction in section 24(b) of the income tax act. If the house property is self occupied the limit of deduction is restricted to Rs. 2L p.a. To get this benefit you must satisfy the condition of self occupancy of the house property and it can happen only when you are in possession of the property. Now about your question, the interest that you pay on your home is before possession is eligible for deduction as 1/5 per year after possession along with the regular interest with maximum limit of Rs.2L p.a.


Leave a Reply

Your email address will not be published. Required fields are marked *