The last few days of December are extremely important from a financial planning perspective. From buying a car at a lower price to securing higher interest rates on savings schemes, several crucial deadlines are ending on December 31. Starting January 1, many changes may impact your expenses, investments, and tax compliance.
Here are four key financial tasks you should complete before December 31 to avoid higher costs, penalties, and missed benefits.
1. Buy a Car Before Prices Increase From January 1
If you are planning to buy a new car, now is the right time. Major automobile manufacturers such as Maruti Suzuki, Tata Motors, Hyundai, and MG Motor are expected to increase vehicle prices from January 1.
MG Motor has already announced a price hike of up to 2% due to rising input costs. As a result, popular models like the MG Hector may become costlier by up to ₹38,000. In the luxury segment, Mercedes-Benz and BMW have also declared price hikes ranging between 2% and 3%.
Buying your car before December 31 can help you save thousands of rupees and lock in current offers and discounts.
2. Invest in Small Savings Schemes Before December 31
Interest rates on small savings schemes such as PPF, NSC, Sukanya Samriddhi Yojana, and Senior Citizen Savings Scheme may be reduced soon. The government reviews these rates every quarter—January, April, July, and October.
After the Reserve Bank of India cut the repo rate by 0.25% to 5.25% on December 5, experts expect a downward revision in small savings interest rates.
Lower repo rates mean banks get cheaper funds, which leads to reduced interest rates on fixed deposits (FDs) and government-backed savings schemes. If you invest before December 31, you can lock in the current higher interest rates for the entire tenure.
3. Link Aadhaar With PAN Before December 31
If your Aadhaar card was issued on or before October 1, 2024, you must link it with your PAN card by December 31. Failure to do so can make your PAN inoperative.
Problems if PAN Becomes Inactive:
- You won’t be able to file Income Tax Returns (ITR)
- Pending tax refunds will be blocked
- Issues with bank accounts, mutual funds, and financial transactions
- Higher TDS deductions
Linking Aadhaar with PAN is mandatory and can be done online through the Income Tax Department website.
4. File Your Income Tax Return to Avoid Losing Refunds
If you have not yet filed your Income Tax Return (ITR) for FY 2024-25, you still have time—but only until December 31, 2025, with a late fee.
However, tax experts warn that filing after December 31 may lead to loss of your tax refund. According to Chartered Accountant Anand Jain (Indore), refunds claimed after this deadline may not be issued and could be forfeited to the government.
Late Filing Fees:
- Income up to ₹5 lakh: ₹1,000
- Income above ₹5 lakh: ₹5,000
Filing ITR-U After December 31:
If you file an updated return (ITR-U) after the deadline, additional tax penalties apply:
- Within 12 months: 25% extra tax
- Within 24 months: 50% extra tax
- Within 36–48 months: 60%–70% extra tax
Final Takeaway
December 31 is a critical financial deadline. Buying a car now, investing in savings schemes, linking Aadhaar with PAN, and filing your ITR on time can help you save money, avoid penalties, and secure financial benefits.
Act now to start the new year stress-free and financially prepared.