Today is last day to complete tax-saving exercise

If you still have not completed your tax-saving exercise for the financial year 2020-21, then you should hurry up as today, March 31, 2021 is the last date to do it. Remember, if the tax-saving related investments and expenditures are not made by you by today, then your tax liability will be on the higher side for the FY 2020-21.Do keep in mind that effective from FY 2020-21, an individual has the option to choose between the old/existing tax regime and new tax regime. If an individual opts for the old/existing tax regime, then the individual will be eligible to claim the tax-exemptions such as house rent allowance, leave travel concession/LTC Cash Voucher Scheme and deductions under sections such as 80C (maximum up to Rs 1.5 lakh in financial year), 80D (deduction on the medical policy premium paid), 80E (Interest paid on education loan) etc.Let us see how much your tax liability will increase if you do not make tax-saving investments. Suppose your total income in the financial year is Rs 10 lakh and you are unable to make investments of Rs 1.5 lakh under section 80C in specified instruments such as Public Provident Fund, equity-linked savings scheme etc., then your tax liability will be Rs 1.17 lakh (under the old tax regime, inclusive of cess at 4%). If you make a tax-saving of Rs 1.5 lakh under section 80C, then your tax liability will be Rs1,06, 600 (inclusive of cess at 4%). This a difference of Rs 10,400. Now, if you opt for the new tax regime, it comes with lower, concessional tax rates but without the common tax-exemptions and deductions mentioned above. In the new tax regime, only deduction which is available is under section 80CCD (2) - employer contribution to the employee's NPS account.If you opt for the new tax regime, at the time of filing income tax return, then your tax liability in the above scenario will be Rs 78,000 (inclusive of cess at 4%).As per tax experts, if the total deduction claimed by you in a financial year exceeds Rs 2.5 lakh, then you are better off in the old tax regime. Also Read: Claiming deduction more than Rs 2.5 lakh? You won't gain muchWhat you should doIf you still have not completed your tax-saving exercise, then there are some online options for you such as 5-year bank fixed deposits, home loan prepayment etc. Also Read: 7 tax-saving investments that can be done onlineIf you are facing a shortfall of funds due to which you cannot make investments in tax-saving instruments on time, then there are certain expenditures that are eligible for deductions under the Income-tax Act. These include, children tuition fees, home loan principal repayment. Further, interest paid on the home loan also offer tax-saving benefit.Also Read: How to save tax without fresh investmentsAs March 31 is the last day of the financial year, ensure that you have the deposited minimum amount in tax-savers such as Public Provident Fund etc. If the minimum amount is not deposited, then the accounts will become inactive.Also Read: Invest in these tax-savers to avoid making account inactive

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