The financial year is coming to end. For most people, this time of the year is synonymous
with tax cuts and money issues. Not without reason, the tax monster eats into the
savings of many individuals & any outstanding obligations only add to the confusion.
Fortunately, you can use the tips in this article to save money during this period
and begin the financial year on a positive note!
1. Calculate your tax liability in advance.
The interim budget has introduced significant changes in the taxation system. Some
individuals have been provided the relief of tax rebates, while others will still
be taxed by the old system. It makes sense to start calculating your tax obligation
now, rather than running around like crazy as the deadline for filling your ITR
approaches. So, speak to your CA to fully understand how the new system works.
2. Look at ways to offset your tax liability.
Once you’ve understood the new taxation norms, you need to look for ways to offset
your tax liability, if any. If you’ve taken a home loan or an education loan
in the current financial year, the interest & principal payments can be used
to claim deduction on your taxable income, thereby reducing your taxation burden.
Further, if you have a health insurance policy for the current financial year,
you can use the premium amounts to reduce your taxable income.
3. File your ITR on time.
Seems like a no-brainer but you’ll be surprised how many people end-up filling their
ITR after the due date. They leave their planning for too late and then make
a mad dash to reduce their tax liability but only manage to do so after the due
date. Missing the due date could result in a fine of Rs. 5,000. This is totally
unnecessary in the overall scheme of things.
4. Invest for the future.
Once you’ve successfully handled the current year’s financial obligations, it makes
sense to start looking for investments that will come handy next year. You could
start planning your retirement, (yes, it’s never too early to start). Most retirement
plans are triple-tax-exempt, meaning the amount invested will get you tax deductions,
the returns earned are also exempted and the end payout too won’t fall under
the taxation radar.
5. Debt consolidation.
That last thing you want to do is take multiple debts into the new financial year.
If you have multiple credit card bills and any outstanding loans, it makes sense
to consolidate them into one single loan. You can do so by taking one single
personal loan to pay-off your debts and then repay one single EMI. This should
make life easier for you as well as help you save loads of money. If you need
more advice in this regard, you can reach out to us, we will help optimize your
debt consolidation.
These tips should help you sail smoothly into the new financial year. Good luck and all the best!