With the financial year 2025–26 nearing its end, taxpayers should complete several important financial tasks before March 31, 2026, to maximise tax savings and avoid penalties. Tasks include making tax-saving investments, submitting investment proofs to employers, paying advance tax and filing an updated income tax return if required.
Make tax-saving investments under Section 80C
Taxpayers following the old tax regime can invest in Provident Fund (PPF), Sukanya Samriddhi Account (SSA) and National Pension System (NPS) to take the tax benefit under Section 80C of the Income Tax Act 1961. Such taxpayers must ensure that all deadline-bound compliances and investments are completed before the end of the financial year 2025-26 on March 31, 2026. Since these schemes also provide tax benefits, it is necessary for NPS, PPF and SSY subscribers to deposit a minimum amount in their respective accounts to avoid the account becoming inactive.
Submit investment proofs to your employer
Employees who have declared tax-saving investments earlier in the financial year must submit supporting investment proofs to their employer before the payroll cut-off date.
The employer may deduct higher tax at source (TDS) from the salary for the remaining months of the financial year, if proofs are not submitted.
Pay advance tax if applicable
The due date for advance tax for the assessment year 2026–27 is March 15, 2026, and missing it could lead to interest charges and penalties under the Income Tax rules. Tax planning is a process wherein you can strategically structure your financial affairs from the tax’s point of view. You can do tax planning to minimise your tax liability within the framework of Income Tax laws.
Advance tax should be paid if the total tax liability exceeds Rs 10,000 in a financial year. Failure to do so can attract interest under tax provisions.
Claim deduction for health insurance under Section 80D
Under Section 80D of the Income Tax Act, 1961, taxpayers can claim a deduction for the premium paid towards health insurance policies. If you invest in health insurance, you can get a deduction up to Rs 25,000 under Section 80D for yourself and your family (Rs 50,000 if age of insured is 60 years or above) and up to Rs 75,000 (Rs 50,000 if age of insured is 60 years or above) for your parents.
ITR -U for AY 2021-22 (FY 20-21)
Taxpayers who missed reporting such deductions earlier can still correct their returns using the updated return facility under ITR-U (Updated Income Tax Return).
Tax benefits for home loan borrowers on loan interest (Under Section 24)
Section 24(b) of the Income Tax Act allows homeowners to take tax benefits on interest paid towards self-occupied properties. Section 24(b) allows you to claim deduction up to Rs 2 lakh against the interest paid on your home loan, making homeownership easy for taxpayers.
Source from: https://economictimes.indiatimes.com/wealth/tax/tax-exemption-limit/financial-tasks-to-complete-before-march-31-2026-to-save-tax-and-avoid-penalties/articleshow/129506290.cms
