Six Tasks For Mak­ing the Best Out of this Fi­nan­cial Year

Here are a few op­tions that you should ex­er­cise for a well-bal­anced FY17

The Economic Times - - Money - Babar.Zaidi@ times­

New Delhi: The crazi­ness of March may be over, but in­vestors and tax­pay­ers still have a few more fi­nan­cial tasks to com­plete. They don’t take too much time or ef­fort, but will cer­tainly put your fi­nances on an even keel for the rest of the year.


This­might­seemalit­tlestrange­given that the tax plan­ning sea­son has just ended. But ex­perts say it is best to start tax plan­ning at the very be­gin­ning of the fi­nan­cial year. If you plan to in­vest in eq­uity-linked sav­ing schemes (ELSS), it is best to start an SIP in April it­self. Our re­search show­sthat­in­vestor­swho­took­theSIP route earned more than those who waited till March to in­vest in ELSS schemes.Stag­ger­ingth­ein­vest­ments across 12 months not only cush­ions you against volatil­ity, but also light­en­s­the­bur­de­nattheendof the­fi­nan­cial year. It’s eas­ier to spare ₹ 2,5003,000 monthly in­stead of putting ₹ 30,000-36,000 at one go in March.


The tax fil­ing dead­line is three months away, but it will help if you start putting to­gether the in­for­ma­tion needed at the time of fil­ing re­turns. If you have for­eign as­sets or earned for­eign in­come dur­ing the year, start col­lect­ing the doc­u­ments right away. Ob­tain­ing tax credit re­ceipts, in­come cer­tifi­cates and other doc­u­ments from for­eign coun­tries should not be kept for later.

The tax depart­ment will scru­ti­nise your in­ter­est in­come in greater de­tail this year. Add the to­tal in­ter­est across all bank ac­counts. Also add the in­ter­est earned on in­fra­struc­ture bonds, NSCs, fixed and re­cur­ring de­posits and other fixed in­come se­cu­ri­ties. If you have a home loan or an ed­u­ca­tion loan, get a cer­tifi­cate of in­ter­est from your lender to know how much de­duc­tion you can claim un­der Sec­tion 24 and Sec­tion 80E.


Pru­dent as­set al­lo­ca­tion is crit­i­cal for suc­cess in in­vest­ing. But many in­vestors don’t know their as­set al- lo­ca­tion be­cause all in­vest­ments are not at one place. If you are among them, it’s time to start us­ing a port­fo­lio tracker. Value Re­search has made it sim­pler for its users. All they have to do is upload the con­sol­i­dated mu­tual fund state­ment and NPS de­tails, and all trans­ac­tions get in­cor­po­rated into the port­fo­lio.


This is the ap­praisal sea­son and your next pay­cheque is likely to be fat­ter. This means you need to in­crease in­vest­ments in the same pro­por­tion. Some in­vest­ments, like your con­tri­bu­tion to the Em­ployee Prov­i­dent Fund (EPF), au­to­mat­i­cally in­crease with rise in in­come. For oth­ers, you can ei­ther in­crease the ex­ist­ing SIP amount or start fresh SIPs in other funds. The idea is, if you are earn­ing more, you should be sav­ing more too. The gov­ern­ment has cut in­ter­est rate on small sav­ings schemes and there are in­di­ca­tions that rates will go down fur­ther if the bench­mark bond yield de­clines. How­ever, the in­ter­est earned on EPF may not come down so much. So, in­stead of PPF which will give 8.1%, salaried in­di­vid­u­als can con­sider the Vol­un­tary Prov­i­dent Fund (VPF). VPF con­tri­bu­tions are el­i­gi­ble for tax de­duc­tion un­der Sec 80C and are tax free on with­drawal.

This is also the time to file Form 15G or 15H to avoid TDS on in­ter­est. Form 15G can be filed by in­vestors be­low 60 who do not have any tax li­a­bil­ity and whose to­tal in­come from in­ter­est is be­low the ba­sic ex­emp­tion of ₹ 2.5 lakh. Form 15H is for in­di­vid­u­als above 60 whose fi­nal tax on to­tal in­come is nil.

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