With just four days left for the financial year 2025-26 to end on March 31, taxpayers need to move beyond basic tax-saving investments and ensure a complete closure of their tax position. From advance
tax payments to documentation and compliance checks, missing even a small step can lead to penalties, disallowances, or notices later.
Here’s a comprehensive list of what should be completed before March 31.
Advance Tax
Ensure 100% of your advance tax liability is paid. This is crucial for those earning through capital gains, F&O trading, freelancing, interest, or rental income. Taxpayers who missed the March 15 deadline can still pay advance tax up to March 31 to reduce their liability. However, delayed payment attracts 1% monthly interest under Sections 234B and 234C on the shortfall.
Tax Harvesting: Book Losses Strategically
Review your portfolio and identify loss-making investments. Booking losses before March 31 allows you to offset gains and reduce taxable income. This is especially relevant for active market participants who have seen volatility this fiscal FY26 amid Trump tariffs and the US-Israel-Iran war.
Carry forward of losses is only allowed if properly reported, so execution before year-end is key.
Complete All Tax-Saving Investments
If you are in the old tax regime, ensure you have fully utilised deduction limits:
- Section 80C (Rs 1.5 lakh limit)
- Section 80CCD(1B) (NPS additional Rs 50,000)
- Section 80D (health insurance)
Many taxpayers rush into last-minute ELSS or insurance purchases, ensure these align with your financial plan, not just tax-saving.
Capital Gains Planning
Don’t just calculate gains, plan them. Check if you can utilise the long-term capital gains (LTCG) exemption limit (Rs 1 lakh in equities). Consider staggered selling if gains exceed thresholds.
Evaluate indexation benefits in debt or property transactions, wherever applicable. Indexation remains unavailable for debt and gold funds bought after April 1, 2023, and the July 2024 changes did not reverse this; however, it continues for real estate and pre-2023 investments.
This step separates basic compliance from smart tax planning.
Dividend & Interest Income Reconciliation
Dividend income is taxable at slab rates, and interest income from FDs, savings accounts, or bonds is often underreported.
Before March 31, estimate total income from dividends, bank interest, and corporate bonds/ debentures.
Verify TDS, AIS, and Form 26AS
Reconcile all income and tax credits. Mismatch between your records and Form 26AS or AIS can lead to notices. If there is an issue, initiate correction with the deductor immediately — waiting till ITR filing may be too late.
Submit Proofs to Employer
If you are salaried, this is critical. Submit investment proofs, rent receipts (for HRA), and home loan interest certificate. Failure to do so means higher TDS deduction in the March salary.
Donations Before Deadline
Donations under Section 80G must be completed before March 31 to be eligible.
Ensure payments are made through banking channels and proper receipts are collected.
Review Old vs New Tax Regime
With the new tax regime becoming the default, taxpayers must evaluate which regime is more beneficial. If you are opting for the old regime (to claim deductions), ensure all investments and proofs are completed before March 31. For business income taxpayers, switching rules are stricter, this needs careful evaluation.
Set-Off and Carry Forward Losses
Ensure proper classification of short-term vs long-term losses, speculative vs non-speculative income, and incorrect reporting can lead to disallowance of set-off in future years.
Last-Minute Compliance Checks
Ensure PAN-Aadhaar linking (if pending), update bank account details, close inactive accounts generating taxable interest, and review high-value transactions (to avoid scrutiny flags).
