Here are 5 things that you should do from a personal finance perspective in the New Financial Year:-
1] Income Tax Returns Filling before Due Date –
The start of the New Financial Year is also the time to file your tax returns for the previous year.
From this year onwards, rules for not filing on time (by 31st July 2017) have changed and there are penalties. Delay in filing a tax return for AY 2017-18 will attract a penalty of Rs 5,000 if filed by Dec 31, 2018, and Rs 10,000 if filed later. Such fee will be restricted to Rs 1,000 for small taxpayers with income up to Rs 5 lakh. For AY 2017-18, one can go online to file ITR if eligible for the new one-page simplified ITR-1 for salaried class and people having income from one house and interest totaling up to Rs 50 lakh.
2] Complete your Section 80C and other Tax Saving Investments –
Don’t postpone your tax saving investments till the last few days of the financial year as you might not be unable to claim the tax benefit for the year despite making the investment. This could happen because of various reasons. In such a case, your investment may go through later on a retry but will only happen after March 31. Consequently, you would not be able to claim the tax benefit in the current financial year.
To claim tax benefit of an eligible tax-saving investment in any given year, the date of the investment needs to be within that particular financial year, i.e., from April 1 to March 31.
3] Match your TDS entries in Form 26AS –
While the tax deducted by your employer will reflect in the Form 16, check out your Form 26AS online to make sure that all other taxes (advance tax, TDS on investments and other direct taxes) have been rightfully credited to your PAN. If there is a discrepancy, notify the deductor immediately and get it corrected before the tax filing season starts.
4] Do Annual Review of your Portfolio –
If you haven’t reviewed your portfolio for a while, there is a good chance that relative market performance of asset classes in last one year has changed your investment mix, causing your combination of mutual funds, stocks, bonds and cash to drift away from your plan. Procrastinating reviewing of your portfolio can add risk, which might cause portfolio to experience larger losses than you are comfortable with in the event of a down market.
Look for underperformers and switch them with good performers after considering their long-term performance. Review consistency and performance of the investments every 24-36 months to take corrective actions.
5] Top up your SIP –
Top up your SIP at the start of the financial year, itself. One might forget to make SIP payments later on. Sometimes an investor wouldn’t have enough money left with to make SIP payments as the investor moves forward through the financial year. One can even think to increase the SIP amount, which always is advantageous.