In this article, we will be discussing what are the things which one should do at the start of the financial year. The Financial Year starts on the 1st of April and ends on the 31st of March. Here are the seven important things one should keep an eye on at the start of the financial year.
1) Start Your ELSS SIP:
- To take the benefit of Section 80 C under the Income Tax Act of up to Rs. 1.5 Lakh, an individual can start investing in Equity Linked Saving Scheme (ELSS) at the start of the year.
- To avoid any lumpsum investment under this section, a person can start a Systematic Investment Plan (SIP) in the ELSS fund and avail of the benefits as well.
2) Managing Your Bonus:
- The initial month of the financial year is the month when many individuals receive bonuses from their respective jobs and hence one gets the chance to manage asset allocation during this period.
- Managing the asset allocation at this time will help the individual not only to efficiently allocate its bonus amount but will also be able to rebalance its asset allocation.
3) Check your Tax Computation Sheet or Other required documents:
- At the beginning of a financial year, an individual should look upon their Tax Computation Sheet or Form 16, 26 AS Statement, Capital Gain Statement, or other necessary tax documents.
- One should check that his/her Form 16, which is generally available by May.
- During April-May, there is a period of Appraisal or bonuses, hence there is a positive impact on the income of an individual, therefore a person should have a look or should restructure the budget for the next year.
5) Review Goals and Increase SIP:
- At the start of the year, one should review his/her financial goals as per the latest period, also, if there is an increase in the income or there is a bonus, one should look-out for an increase in his/her SIP as well.
6) Tax Planning:
- One should also make things ready for Tax Planning like Sukanya Samriddhi Yojana Account, National Pension Scheme Account, Employee Provident Fund Account, Component change in the company, PPF Account, MF Account, or others.
7) New Tax Rule:
- Firstly, one should have an eye at the new changes in the taxation rule, if there are any.
- As for Crypto investors, there will flat 30% tax rate applicable on the investments from the 1st of April 2022.
What Should An Individual Do?
All the steps discussed above are some of the important steps that one should carefully consider to avoid any rush or missing out on any regulatory norms or benefits at the end of the financial year.
Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent are commendation to buy or sell stocks or MF.