As the financial year is ending on March 31, 2025, several important financial matters require immediate attention. From securing high fixed deposit interest rates to making last-minute tax-saving investments and filing income tax returns (ITR) accurately, it is crucial to act before the deadline to maximize financial benefits and avoid penalties. Taking proactive steps now can ensure a smooth transition into the new financial year without any financial setbacks.
GET HIGH INTEREST RATE BY INVESTING IN SPECIAL FIXED DEPOSITS (FDs)
With banks adjusting their fixed deposit (FD) interest rates in response to the Reserve Bank of India’s (RBI) repo rate cuts—from 6.50% to 6.25%—locking in high interest rates before further reductions can be a smart financial move. Several banks are currently offering special FDs with attractive interest rates, which can help investors earn higher returns on their savings.
- SBI’s Amrit Vrishti FD provides 7.25% interest for general citizens and 7.75% for senior citizens for a tenure of 444 days.
- Indian Bank’s IND Supreme 300 Days & IND Super 400 Days FDs offer up to 8.05% interest for super senior citizens, making them one of the best choices for retirees looking to secure a steady income.
Fixed deposits are a safe investment option, especially for risk-averse individuals. By investing before March 31, 2025, one can ensure they get the best available rates before potential rate cuts take effect.
REDUCE TAX LIABILITY BY INVESTING IN TAX-SAVING INSTRUMENTS
For those who have opted for the old income tax regime, making the right investments before the financial year-end can significantly reduce taxable income and help save money. Section 80C of the Income Tax Act allows deductions of up to ₹1.5 lakh, and investing in eligible instruments before March 31 can maximize tax benefits.
Popular tax-saving investment options include:
- Employees’ Provident Fund (EPF) – Mandatory for salaried individuals, offering tax-free interest and maturity benefits.
- Public Provident Fund (PPF) – A long-term savings option with tax-free interest and an annual investment limit of ₹1.5 lakh.
- Equity Linked Savings Scheme (ELSS) – A market-linked mutual fund with a three-year lock-in period, providing the dual benefits of tax savings and capital appreciation.
- National Pension System (NPS) – Contributions qualify for deductions under Section 80CCD(1) and an additional ₹50,000 deduction under Section 80CCD(1B), reducing overall tax liability.
Ensuring that these investments are made before the deadline is essential to claim deductions and optimize tax savings for the financial year.
FILE YOUR INCOME TAX RETURNS (ITR) CORRECTLY TO AVOID PENALTIES
Filing ITR on time is crucial to prevent penalties, interest charges, and legal complications. Even if you have already paid your taxes, failing to file your return before the deadline could result in late fees of up to ₹5,000 under Section 234F of the Income Tax Act.
To avoid errors, double-check:
- Personal details, such as PAN and Aadhaar linking
- Income sources, including salary, rental income, interest earnings, and capital gains
- Tax-saving investments and deductions claimed under Sections 80C, 80D, 80G, etc.
- Bank account details for timely tax refunds
Filing ITR early can also help in faster processing of tax refunds, ensuring liquidity when needed.
UPDATE NOMINEE DETAILS IN FINANCIAL ACCOUNTS
It is important to review and update nominee details in:
- Bank accounts (savings, fixed deposits, and recurring deposits)
- Mutual funds and stock market accounts (Demat)
- Insurance policies (life, health, and term insurance)
- Provident fund accounts
Updating nominee details ensures a smooth transition of assets in case of unforeseen circumstances and prevents legal disputes among heirs.
ENSURE MINIMUM ACCOUNT BALANCE TO AVOID BANK PENALTIES
Many banks levy penalties if the minimum balance requirement is not met in savings accounts. Review your bank account balance to ensure compliance with bank policies and avoid unnecessary deductions.
RENEW OR BUY HEALTH AND LIFE INSURANCE POLICIES FOR TAX BENEFITS
Health and life insurance policies provide financial security while also offering tax benefits under Section 80D and Section 80C, respectively. Timely renewal of policies ensures uninterrupted coverage, while purchasing new policies before March 31 can help in reducing taxable income.
- Health insurance premiums for self and family – Up to ₹25,000 deduction under Section 80D, and ₹50,000 if covering senior citizen parents.
- Life insurance premiums – Eligible for deductions under Section 80C, ensuring financial protection for dependents.
CLEAR CREDIT CARD DUES AND LOANS TO AVOID HIGH INTEREST COSTS
Credit card debt attracts high-interest rates, often exceeding 36% annually, leading to financial strain if not managed properly. Clearing outstanding dues before the financial year-end can improve credit scores and financial stability.
For those with existing loans, making part-prepayments can help reduce overall interest outflow.
REBALANCE YOUR INVESTMENT PORTFOLIO TO ALIGN WITH FINANCIAL GOALS
A periodic review of your investment portfolio ensures that financial goals remain on track. Rebalancing involves adjusting the allocation of assets in:
- Equities (stocks and mutual funds)
- Debt instruments (bonds and fixed deposits)
- Alternative investments (gold, real estate, and REITs)
This strategy helps in optimizing returns and managing risks effectively.
LAST-MINUTE TIPS FOR A SMOOTH FINANCIAL YEAR-END
- Reconcile tax deducted at source (TDS) with Form 26AS to ensure no discrepancies.
- Donate to charitable organizations before March 31 to claim tax deductions under Section 80G.
- Check employer-provided tax declarations and submit required proofs to avoid excess tax deductions from salary.
- Plan your expenses and budget for the new financial year to set a strong financial foundation.
Taking these financial steps before March 31, 2025, can help maximize tax savings, improve financial security, and set the stage for a stable and prosperous new financial year.
