Four financial deadlines to meet before December 31 to avoid higher costs in the new year
PTC Web Desk: With just days left before the year ends, December 31 marks an important deadline for several financial and compliance-related decisions. From buying vehicles at lower prices to locking in higher interest rates and completing mandatory documentation, individuals have a limited window to act before new rules and price hikes take effect from January 1.
Here are four key tasks that should be completed before December 31:
Limited-Time Window to Buy Vehicles at Current Prices
Prospective car buyers may want to make their purchase before the end of the month, as several automobile manufacturers are expected to raise prices from January 1. Companies such as Maruti Suzuki, Tata Motors, Hyundai and MG Motor are likely to revise prices upward.
MG Motor has already announced a price increase of up to 2%, citing rising input costs. As a result, popular models like the MG Hector could become costlier by up to Rs 38,000. In the luxury segment, Mercedes-Benz and BMW have also confirmed price hikes ranging between 2% and 3%.
Possible Cut in Small Savings Scheme Interest Rates
Interest rates on government-backed small savings schemes may be reduced after December 31. These schemes include 11 savings instruments, whose rates are reviewed by the government every quarter, in January, April, July and October.
The possibility of a rate cut follows the Reserve Bank of India’s decision on December 5 to reduce the repo rate by 0.25 percentage points to 5.25%. A lower repo rate makes borrowing cheaper for banks, often leading to reduced interest rates on fixed deposits and small savings schemes. Investors planning to park money may benefit by investing before the revision.
Aadhaar–PAN Linking Deadline Approaching
Individuals whose Aadhaar cards were issued on or before October 1, 2024, must link Aadhaar with their PAN by December 31. Failure to do so could result in the PAN becoming inoperative.
An inoperative PAN can prevent individuals from filing income tax returns, receiving refunds, or completing banking and mutual fund transactions, causing significant inconvenience.
Income Tax Return Delay May Lead to Loss of Refund
Taxpayers who have not yet filed their Income Tax Return (ITR) for the financial year 2024–25 can still do so with a late fee until December 31, 2025. However, tax experts warn that delaying beyond December 31 this year could result in the forfeiture of eligible refunds.
Refunds cannot be claimed if the return is filed after the prescribed deadline, and the amount may be absorbed by the government.
Late filing penalties include:
Rs 1,000 for income up to Rs 5 lakh
Rs 5,000 for income above Rs 5 lakh
Additionally, filing an updated return (ITR-U) after the deadline attracts higher penalties:
Within 12 months: 25% additional tax
Within 24 months: 50% additional tax
Within 36 to 48 months: 60%–70% additional tax
- With inputs from agencies
