Last days to save tax: What you may miss if you don’t act before March 31

With just a few days left before the end of the financial year 2025-26, many taxpayers are rushing to make last-minute investments to save tax. However, tax planning should not be done in panic mode, says Gaurav Bhagat, Founder, Gaurav Bhagat Academy, who advises taxpayers to first review their overall income, deductions, and tax regime before making any decision.

According to Bhagat, the biggest mistake people make every March is investing blindly under Section 80C without checking whether the old tax regime is actually beneficial for them. Since the new tax regime is now the default, taxpayers must compare both regimes before investing just to claim deductions.

“The first step should be to calculate your total deductions. If your deductions under the old regime are not high enough, the new regime with lower tax rates may result in less tax even without investments,” Bhagat says. He adds that taxpayers should avoid buying insurance or locking money in long-term products only to save a small amount of tax.

For those who continue with the old tax regime, Bhagat suggests going beyond the basic ₹1.5 lakh limit under Section 80C. One of the most useful options is contributing to the National Pension System (NPS), which allows an additional deduction of ₹50,000 under Section 80CCD(1B). This extra deduction can help reduce taxable income further and is often ignored by salaried individuals.

Health insurance is another important area that taxpayers should review before March 31. Under Section 80D, deductions are available for premiums paid for self, spouse, children, and parents. Bhagat points out that medical costs are rising every year, so buying adequate health insurance should be seen as financial protection first and tax saving second. Higher deduction limits are available if parents are senior citizens, which many taxpayers forget to claim.

Bhagat also advises taxpayers to check their capital gains and investment portfolio before the financial year closes. Booking losses in underperforming investments before March 31 can help offset taxable gains, while planning sales carefully can help stay within the exemption limits available on long-term capital gains.

Salaried employees should also review their salary structure and reimbursements. Some benefits such as Leave Travel Allowance (LTA), internet or phone reimbursements, and other employer-provided allowances may still be claimable if proofs are submitted before the deadline. Missing these can result in higher tax deduction at source (TDS).

Another common mistake, Bhagat says, is waiting until the last week of March to act. “Tax planning should ideally start at the beginning of the financial year, but even now taxpayers can reduce their tax burden by reviewing deductions, insurance, investments, and employer benefits carefully,” he explains.

He emphasises that the goal should not be just to save tax for one year, but to build long-term financial stability. “Do not buy a product just because someone says it saves tax. If an investment does not fit your financial goals, it is better to pay tax than to lock your money in the wrong place,” Bhagat says.

With the March 31 deadline approaching, taxpayers who plan carefully instead of rushing are more likely to save tax in the right way while also strengthening their overall financial position.