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In The New Financial Year, Start With These 5 Goals

Adhil Shetty

It is always wise to start planning for the current financial year in April itself to avoid the last minute rush. Read on to know how beginning with these 5 goals can help.

The new financial year – 2018-19 – has set in and you must have heaved a sigh of relief after completing all financial obligations to save tax for the previous year. April will bring cheer to taxpayers as they can relax for a while after the financial year-end. But it’s wise to start planning for the current financial year in April itself to avoid the last minute rush. In fact, careful planning and discipline can help you save a lot of stress. Usually, taxpayers keep everything to the last minute and then rush and invest randomly to save taxes. But make amends and start proper planning in April itself for a sound financial year.

Submit Investment Declaration in April:  Usually, employers ask their employees to submit the investment declarations in April itself so that they can plan accordingly in terms of tax deducted at source or TDS. In case your employer for some reason does not ask for it, make it a point to discuss the same with your HR and submit an investment declaration in April itself so that excess TDS is not deducted from your salary.  If you invest wisely, you can avoid TDS altogether.

For an efficient planning, you can consult a tax expert for a tax saving investment guidance. You can keep a copy of the declaration with yourself to assign yourself a goal or target to achieve in the new financial year. This will also bring a sense of discipline in savings and investment.

Tax Savings Instrument: Usually, Public Provident Fund (PPF) is the most preferred mode of saving tax as a contribution made to this fund is eligible for deductions under Section 80C and interest earned on it is tax-free. However, instead of monthly contribution, you can plan a lump sum payment at the beginning of April itself for the simple reason that it will accrue interest on the lump sum amount for the full year. It will be a win-win situation for you. You will earn more interest which will be tax-free. You can also opt to go for Voluntary Provident Fund where you can invest more than 12 percent in Employees’ Provident Fund to avail higher deduction under section 80C and save taxes.

Use Proper Forms To Save Taxes: Most investors are unaware that you can avoid TDS if you submit proper forms to the concerned authority. For example, you can submit form 15G to avoid TDS on interest on Fixed Deposits, Savings Account or Recurring Deposits if it exceeds Rs 10,000, but your estimated gross income falls below the basic exemption limit of Rs 2.5 lakh. Senior citizens need to submit form 15H to avoid TDS if they earn interest more than Rs 50,000 but their gross income for the financial year will be below the exempted limit. In this way, you can take home more money as you save on taxes. If you fail to submit the form and TDS is deducted, then you have to go through the tedious process of applying for a refund when submitting the returns.

Use The Increment Or Bonus To Reduce Debt: The increment you get owing to annual hikes or bonuses by the employer should be wisely used to pay off debts. You can use the extra income to get rid of a debt and save the money on interests. Besides, once you have paid off your debt, you can start using the extra cash for investing in the new financial year. You can opt for SIP in equity-linked savings scheme and invest for the future.

Remember To File Your Returns On Time: Filing your returns on time has its share of benefits. Hence, you must adhere to the deadlines. In the new financial year, there is a penalty imposed for delayed returns filing. You must submit your returns before July 31 to avoid penalty of any kind.

Hence, it is important to ensure a good planning and discipline when you set financial goals for yourself in the new financial year.

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