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Eight tax saving tips for the new financial year

With all the past financial errors and mistakes coming to an end, we wish to commence the new financial year with ease. For that, one must follow all the right guidelines in order to lead the upcoming financial year, peacefully. For starters, begin by setting financial goals followed by saving taxes, later. Take a look at these 8 tax-saving tips you need to follow for the new financial year which will help you in the longer run:

List of 8 tips for the new financial year:

1. Assess your investment portfolio

It is important to assess your investment portfolio in order to stay updated with the market performance of the past year. Change in the relative market performance brings about changes in your investment mix. This further causes your combination of funds, stocks bonds, and cash to drift away from your game plan.

While reviewing your investment portfolio is important, it is also advisable to adjust your investment strategy as well as target asset mix. If you have experienced any major change in the past financial year, then see to it that you do so without fail. For instance, events like retirement, marriage, and the birth of a child come under this category.

2. Invest in ULIPs or ELSS

Although a salaried individual knows his earnings in the ensuing year, there might be a possibility of being unaware of whether or not you’re utilizing its entire tax benefits. The best way to make use of tax benefits is by utilizing either in Unit Link Insurance Plan (ULIP) or Equity Linked Saving Scheme (ELSS).

Investing in ULIPs ensures savings in the taxes as well as receiving higher returns, at the same time. The same is not the case when you invest in an ELSS, which offers no tax benefits on returns.

3. Set a retirement goal

Another thing that you can simply do in order to save taxes is the review of your retirement accumulation. It is highly recommended to do so as an annual review for a long-term financial goal is important.

The best way to save lots for your retirement is by investing in a National Pension System (NPS). This will simply ensure that you have enough corpus generated for your retirement. See to it that you invest in the NPS at the beginning of a financial year for tax-saving benefits.

4. Analyze your insurance needs

The best time to analyze your insurance needs is at the beginning of every financial year. Invest in an insurance plan keeping in mind the past changes and the current scenario of your family in mind.

Depending upon the need of the family, select a plan that not only enhances your life cover but also safeguards your dependents in times of unfortunate events. Opt for an insurance plan which offers benefits for you and your family as well as generates higher returns.

5. Increase your SIPs

A majority of time Systematic Investment Plan (SIP) are constant which means that it does not increase every year. Since SIPs are usually very high, there are times when investors do not find it realistic. This simply triggers the affordability issue amongst the investors.

In order to avoid the question of affordability, increasing SIPs is the only solution. When you do so, your SIPs will start at a lower rate and gradually keep increasing over time. This not only stimulates growth in your annual income but also increases the ability to invest.

6. Utilize your annual bonus

Making the right use of your bonus is a smart investment. However, before paying off your past debts, it is mandatory to plan whether you should take a full loan or pay it off partially in order to do so.

After you receive your bonus, invest a lump sum amount for your upcoming goals like your child’s further education, family vacation, and so forth. This will simply make sure that your money is utilized for all your long term goals and does not go wasted.

7. Deposit 15G or 15H certificates

If you want to ensure that TDS is not deducted from your income, then see to it that you submit either 15G or 15H certificate. In order to make sure the procedure is looked after upon immediately, deposit these documents once the financial year commences.

Before depositing your certificates, it is important to have a PAN for applying for the given certificates. A majority of banks allow online submission of these forms in order to make things simpler for you.

8. Evaluate your financial goals

If you think saving up a sum of amount aside for your future endeavors is enough, then think twice. The best possible way to do so is by defining your long term goals and then taking actions accordingly to achieve those.

An investment made with a purpose in mind helps you to prioritize your goals right. Therefore, see to it that you plan before and invest later.

Now that you know these 8 best tax saving investment tips for the new financial year, when do you plan on implementing them? With these tips, we are sure that you’ll be saving up more than you expected.

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