March 31 is the deadline to complete tax saving investments/expenditures every financial year – and it is just a few days away in this financial year, 2023-24. However, the deadline falls on a Sunday this year. Further, there is a bank and stock market holiday on March 29 – Friday. Banks are open on March 30, 2024 – Saturday – as it is the fifth working Saturday, but the stock market and mutual fund houses will be closed on this day. So, the last date to finish the tax-saving exercise this year is likely to be March 28, 2024, depending on your choice of tax-saving investment and mode of investment.
The Reserve Bank of India, via a press release dated March 20, 2024, announced that bank branches dealing with government business i.e. government agency banks will be open on March 31 (Sunday). However, the bank you want to deal with may or may not be in this list. Further, it is not clear whether these banks would be open for all public transactions on March 31 or only for government business transactions. Additionally, any transaction done at the bank -even if open on the last day of the financial year runs the risk of getting delayed beyond Sunday midnight due to server being down/technical issues. Therefore, completing your financial transactions for tax saving prior to March 31 would be the wiser move. It is important to remember that your tax-saving investment money/expenditure should reach the institution concerned on or before March 31, 2024.
Akhil Chandna, Partner, Grant Thornton Bharat, says, “For an individual to be eligible to claim the benefit of tax-saving deductions such as under Section 80C, 80D, it is important to ensure that the money has been credited into the financial institution’s bank account on or before March 31, 2024. The investment date must be on or before March 31, 2024, for tax-saving investment or expenditure to be eligible for deduction under the relevant section for FY 2023-24 (AY 2024-25).”
Those planning to invest in ELSS mutual funds and claim the benefit under Section 80C must ensure that the money has reached the mutual fund concerned on or before March 31, 2024. This means that the date of allotment of units of the ELSS mutual fund scheme or the NAV date should be March 31 or before.
Mayank Bhatnagar, Co-founder & COO, FinEdge, says that it is better to complete the investment before March 28 to avoid any last-minute hassles.
If you are investing via cheque, ensure that the money is debited on or before March 29, 2024. Remember there is a bank holiday on March 25, on account of Holi, and banks are closed on March 23, as it is the fourth Saturday of the month. Due to these holidays, a cheque issued on Friday (March 22, 2024) is unlikely to be cleared before March 26 or March 27, depending on the bank’s efficiency. Hence, if the cheque does not clear on time, then you might miss the opportunity to complete the tax-saving investment process on time – before March 31.
Further, if the payment is made via a cheque for investment in post office small savings schemes or ELSS mutual funds, the realisation of funds may take up to three days. It may be better to invest using other methods such as Internet banking or UPI wherever possible to ensure last-minute investments are done on time.
Bhatnagar says, “For mutual fund investments, the NAV that will be applicable to your investment will be given on the day when the funds are credited into the bank account of the mutual fund. The realisation of funds is applicable to all purchase transactions and purchase transactions via switching between different schemes. This rule is applicable from February 1, 2021.”
Check the websites of mutual fund houses to know how fund transfers must be done to get the NAV on the same day. For instance, according to HDFC mutual fund website, the cut-off timings to get the same day NAV is as follows:
| Payment Mode | Bank Name | Cut-off Time | Day of Debit to Investor’s account | Day of Unit Allotment |
| UPI / IMPS | All Banks | 2.45 PM | T | T |
| Net Banking* | HDFC Bank | 2.45 PM | T | T |
| ICICI Bank | 2.45 PM | T | T | |
| Axis Bank | 2.45 PM | T | T | |
| Kotak Bank | 2.45 PM | T | T | |
| IDBI Bank | 2.45 PM | T | T | |
| Yes Bank | 2.45 PM | T | T | |
| State Bank of India | 2.45 PM | T | T | |
| All Other Banks | 3.00 PM | T | T +1 | |
| RTGS | All Banks | 2.30 PM | T | T |
| NEFT | All Banks | 1.00 PM | T | T |
| NACH Mandate | All Banks | 3.00 PM | T + 1 | T + 2 |
| Cheque Mode | All Banks | 3.00 PM | T + 2 | T + 3 |
* While these 7 banks are technically enabled to provide real time credit, not all payment aggregators may be integrated with all the banks in which case the date of credit to MF account / unit allotment will happen on T + 1. T stands for transaction day or the day on which the transaction is done.
So investors must check with their respective fund houses to ensure that the money is credited on time and the allotment of units in an ELSS mutual fund happens before March 31, 2024.
Many individuals who are short on money may want to switch their existing mutual fund investments into ELSS mutual funds for tax-saving purposes. From February 1, 2023, the payout rules for equity schemes have changed; these have not changed for liquid and debt schemes. Currently, switch-out from equity mutual fund schemes to any other mutual fund scheme takes T+2 business days, provided the switch-out application is submitted before 3 PM. Hence, the switch-in to ELSS mutual funds must be received by March 26, 2024, to get the tax-savings benefit. If the switching from an MF equity scheme into an ELSS scheme is done on March 26 then the NAV date or allotment date is likely to be March 28.
