Last-Minute Tax Planning: 5 Investments to Make Before March 31 to Save Tax in the New Regime
1. Employer NPS Contribution (Section 80CCD(2))
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Benefit: Employer's contribution to your NPS is deductible (up to 14% of basic salary).
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Action: Check if your salary structure includes this. (Cannot make personal contributions for deduction.)
2. Standard Deduction
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Benefit: Automatic ₹75,000 deduction for salaried individuals.
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Action: Verify it is included in your Form 16 (Form 130).
3. Capital Gains Harvesting
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Benefit: LTCG from equity/mutual funds is tax-free up to ₹1.25 lakh per year.
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Action: Sell holdings to book gains up to ₹1.25 lakh and repurchase to reset cost basis.
4. Maintain Minimum Balance in Govt Schemes
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Benefit: Prevents accounts (PPF, SSY, NPS) from becoming dormant.
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Action: Deposit minimum required amount (₹500 for PPF, ₹250 for SSY) before March 31.
5. Home Loan Interest (Let-Out Property)
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Benefit: Full interest deduction allowed against rental income, even in New Regime.
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Action: Obtain interest certificate from bank and claim against rent received.
Quick Reference Table
| Strategy | Available in New Regime | Deadline |
|---|---|---|
| Employer NPS Contribution | ✅ Yes | Salary structure dependent |
| Standard Deduction | ✅ Yes (₹75,000) | Automatic |
| Capital Gains Harvesting | ✅ Yes (₹1.25 lakh exemption) | March 31 |
| Govt Scheme Minimum Balance | ❌ No deduction, but required | March 31 |
| Home Loan Interest (Let-out) | ✅ Yes (against rental income) | March 31 |
| Section 80C / 80D | ❌ Not allowed | N/A |
Key Takeaway
The most impactful last-minute action is capital gains harvesting—utilize the ₹1.25 lakh LTCG exemption before March 31. Also, review your salary structure for employer NPS contributions to maximize benefits in the coming year.