Where to invest in last-minute tax rush

Make the most of the last three days of the financial year if you wish to be money-wise. While you need to pay your taxes, you also need to make sure you invest and claim any money payable to you within this financial year.

Firstly, one needs to pay the taxes to avoid any penalties or at least reduce the interests payable on delayed payments.

For those who have not filed their returns for the previous years, this is the last chance to file your returns. "File your IT returns for the FY 2014-15 (AY 2015-16) before 31st March 2017, else you will no longer be allowed to file the same. Also, file the previous year's returns by 31st March 2017, if possible,'' says Yogita Dand, certified financial planner (CFP).

For the current financial year, calculate your tax outgo based on your total income and your tax bracket. In case you are liable to pay any Advance Tax or Service Tax, etc, make sure you pay these taxes before March 31. Bear in mind that you may still attract a penalty for delayed payment. You may need to pay the penalties too along with the taxes.

While making the payments, make sure to include any payments towards surcharges or cess as applicable.

If you have changed your job during the year, please collect the Form 16 from your previous employer and calculate the tax payable on your entire income. Chances are that you may not have declared your previous income to the current employer and you will become liable to pay tax on the total income. If there is some tax payable, do pay it off as advance tax, so you can save interest on the same.

Check out how much you need to invest to save on taxes and try to invest the maximum amount to take advantage of the tax breaks. At present, one can save upto Rs 1.5 lakh by investing in various specified investments under Section 80C and an additional Rs 50,000 by investing in National Pension Scheme (NPS).

Make sure to buy adequate health insurance to help in times of medical emergencies. It is necessary to renew the medical insurance every year by paying the renewal premium within the specified period.

While purchasing a life insurance policy, ensure that the policy covers the life of the earning member of the family. Do not purchase a life insurance policy for investment purpose.

"If there is yet some amount to be invested under Sec 80C, ensure that you make such contribution to your PPF account or invest in an ELSS Fund,'' says Dand. Even if you do not have surplus funds to invest in the PPF, you need to invest a minimum of Rs 500 in a year to ensure continuity of the PPF. Similarly, one needs to invest a minimum of Rs 1000 in a year for NPS (Tier I).

While investing a minimum amount in a year defeats the very purpose of the long term investments, it ensures that your account remains active and avoids penalties that may be applicable. For instance, in case of the PPF, a penalty of Rs 50 is levied if one fails to deposit the minimum amount of Rs 500 during a financial year.

It is preferable if you do any payments either towards taxes or investments, through the online mode so as to ensure that your payments are made well within the due dates. Cheque payments carry the risk of not being honoured due to signature mismatch or some such minor problems.

Make sure you claim your Leave Travel Allowance (LTA) if you are eligible for the same. One can claim LTA twice in a block of four years.

"Keep all your medical bills ready in case you are eligible for medical expenses reimbursements from your employer,'' says Dand. Medical expenses reimbursements from employer for medical expenses cannot exceed Rs 15000 per year.

"Ensure you have all your loan documents such as home loan certificate and interest certificate ready for the filing of this year's return,'' says Dand.

Also, make sure you have submitted the necessary proof of investments to your employer to ensure that they do not deduct a huge chunk from your salary towards taxes.

If you are financially literate, the chances are you will not be doing your tax planning at the last minute. But in case, you are not aware of your tax outgo, it would be advisable to talk to financial professionals to calculate your tax outgo and to decide on your investments. The cost of the financial advice may be worth your while in savings.

It is said that tax and death are inevitable. Make sure you do not repeat the last minute scramble in the coming year. It is best if one plans for taxes and investments in the first month of the new financial year.