Now as the first month of the new FY 2021-22 is about to end, amid the raging pandemic you need to complete some of the financial tasks in April itself.
1. Tax planning should be started early:
Tax planning: beginning tax planning exercise early in a financial year helps significantly. As accordingly, you would be able to evaluate rightly the amount you would need to invest to save maximum task. Further, this tax planning at the start is crucial if you wish to invest in market-linked investments such as NPS and ELSS. One can also start a SIP in ELSS fund that can save tax as well as enable the investor to benefit from the volatility in the markets.
2. Submit form 15G/15H:
While you may be afraid to step out of the house amid the pandemic, you with investments in FD can submit form 15g or 15H online to avoid tds deduction on FD income in case your taxable income is less than the basic tax exemption limit of Rs. 2.5 lakh.
Last year for the financial year 2019-20, the government extended the validity of form 15G or form 15H till June 30, 2021.
3. Open or Invest towards PPF:
For getting a higher payout, it is always advised that one starts PPF investment early i.e. at the beginning of the financial year. This is because investments made early in the financial year will enable the person to earn interest all through the year. Also, the interest on PPF is calculated monthly i.e. on the monthly minimum balance at the credit of account from the close of the 5th day of the month and the end of the month.
Also, there can likely be a case that after the political reasons due to which the small savings rate cut was reversed, may still propel the government to again reduce the key small savings rate. So, better to lock in investments at a higher return.
4. Start investing in small savings scheme:
Apart from the equities, one should also safeguard one’s investment by parking their corpus in safe investments such as small savings scheme that are backed by sovereign guarantee. Investors can earn a fixed return on them and over the years time, they help in enhancing one’s fortunes.
5. You can also increase your EPF contribution:
In case your salary increment or your disposable income allows you can also increase your employee contribution. But remember from this year there has been put new tax limitation in respect of EPF. For any contribution to PF over Rs. 2.5 lakh in a year, interest accrued on it will now draw tax implication.
One can also consider stepping up investment in other financial investments such as SIPs to take advantage of the rupee cost averaging and also to make it at par with your salary increment. This is such that your life time financials goals could be reached early in life.
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