ITR Planning for the New Financial Year: Start Now!

A new financial year brings fresh opportunities to plan your taxes efficiently. Instead of rushing at the last minute, proactive ITR planning helps you optimize savings, stay compliant, and avoid unnecessary stress. Here’s your ITR Planning Checklist to ensure a hassle-free tax filing process.

1. Choose the Right Tax Regime

The old tax regime offers deductions and exemptions, while the new tax regime has lower tax rates but fewer benefits. Compare both based on:

• Your annual income and tax slab

• Available deductions (80C, 80D, HRA, etc.)

• Expected investments and financial goals

Choosing the right regime from the start helps you optimize tax savings.

2. Maintain Proper Books of Accounts

Good financial record-keeping ensures smooth ITR filing and audit readiness. Key steps:

• Keep track of income sources (salary, business, investments, etc.)

• Maintain bank statements, invoices, and receipts

• Use accounting software or a tax consultant for accurate reporting

Regularly updated books reduce last-minute errors and mismatches.

3. Plan Deductions in Advance

Maximizing deductions lowers taxable income. Start planning investments under:

• Section 80C – PPF, ELSS, NSC, EPF, Life Insurance, Tax-saving FDs

• Section 80D – Health insurance premium for self & family

• Section 80E – Education loan interest repayment

• HRA Exemption – If living in rented accommodation

Early planning ensures you fully utilize tax-saving options without last-minute decisions.

4. Set Up Tax-Saving Investments Early

Instead of waiting until March, invest in tax-saving options from April itself:

• Systematic investments in ELSS mutual funds (lock-in 3 years)

• Monthly contributions to PPF or NPS

• Pre-plan fixed deposits and insurance premiums

Spreading investments throughout the year eases financial burden and ensures maximum benefits.

5. Estimate Advance Tax Payments

To avoid penalties on underpayment of taxes, estimate your advance tax liability:

• Salaried individuals with additional income (freelancing, rental, capital gains)

• Business owners and self-employed professionals

• Investors with capital gains, dividends, or interest income

Advance tax is payable in four installments (June, September, December, and March). Staying on track prevents interest penalties under Sections 234B and 234C.

6. Keep Track of Tax Law Changes

Tax rules and slabs may change annually. Keep yourself updated on:

• Budget announcements affecting personal income tax

• New deductions or exemptions introduced

• Changes in capital gains tax rules

Staying informed ensures compliance and smart tax planning.

Final Thoughts

Early ITR planning helps you maximize savings, avoid penalties, and file taxes stress-free. Start today by selecting the right tax regime, organizing records, planning deductions, and estimating advance tax payments.