FY’2021-22: 5 Plans for New Financial Year
The new financial year 2021-2022 has started and you should start planning 5 financial planning from now on. By doing so, you can get rid of all kinds of tensions/hassles at the end of the year. In this new financial year, you have to make a lot of investment and financial planning so that your future can be secured and you can also save tax.
Let us take a look at the list of these 5 financial activities so that you can make financial planning easier.
1) Submitting Form 15G/15H
If your income is less than the taxable limit and you do not need to pay the tax, you will have to fill in 15g and 15h forms to protect you from TDS on behalf of your banker. In fact, TDS is deducted before paying interest on the capital deposited on behalf of the bank. It is to be noted that these forms are to be deposited with the financial institutions at the beginning of any financial year.
2) Decide between new and old tax regime
Now there are two kinds of systems to pay tax in front of taxpayers. Those who choose a new tax system will not get the benefit of about 70 kinds of reduction, while those continuing with the old system will get the benefit. If you decide at the beginning of the financial year that you have to stay in the old system or go with the new one, you will be able to make a year-long planning. The old tax system is right for those whose salary is not very high and they have a lot of investments.
3) Plan your tax now
You can start planning your tax from now, because planning at the last moment often leads to a lot of difficulties, which makes you pay more tax. You may have been planning some investments before, but now you have a better choice than that, you can go to another option to compare where you benefit more.
4) Proactive approach adopted for FY 2020-21
The last date for filing of tax for any financial year is 31st July. Many a times, the date is also extended on behalf of the income Tax department, as seen several times during the Corona period. You can start submitting all kinds of documents to file income tax from now on. These may include documents such as investment statement, bank statement, home loan principal repayment certificate, form 26AS or rent agreement to avoid the last minute hassles leading to incorrect/loss making investments.
5) Investment in PPF
If you start investing in PPF at the beginning of the financial year, you will earn interest for the whole year. A lot of people invest money in the government-guaranteed PPF scheme for the purpose of saving tax. Interestingly, if you have to earn more interest, invest on the 5th of every month, as there is a tax calculation on the balance amount on the same day.
I am Nikesh Mehta, owner and writer of this site.
I’m an analytics and digital marketing professional and also love writing on finance and technology industry during my spare time. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business. I can be reached at [email protected] or LinkedIn profile.