1. Start tax planning for the year

The Financial Tasks mainly includes tax planning, Since tax planning season is still a long way off, few people are thinking about tax savings right now. However, experts advise that you begin tax preparation in April rather than waiting until the last few weeks of the fiscal year and making hasty decisions. Start a SIP in a tax-saving fund right away if you want to invest in ELSS funds. You should have completed 10-12 SIPs by February-March. Starting early also means you won’t run out of cash at the end of the year due to the clumping of tax-saving savings. You’ll have plenty of time to choose the best choice.

Our research shows that investors who took the SIP route earned more than those who waited till March to invest in ELSS schemes. Staggering the investments across 12 months not only cushions you against volatility, but also lightens the burden at the end of the financial year. 

2. To stop TDS, file types 15H or 15G.

To avoid TDS on dividends and interest income, apply Form 15G (for those under 60) or Form 15H (for senior citizens) now. There are certain prerequisites that must be met first. If gross interest income does not surpass the permissible exemption cap (Rs 2.5 lakh) and total income is tax-free, Form 15G may be filed. Form 15H is for senior citizens who have no projected tax liability for the fiscal year. Every year, the forms must be filled out again. Banks now allow for the submission of these forms online, which is a convenient choice for senior citizens, particularly in these times.

3. Invest in a PPF account.

The Public Provident Fund will have better returns than the taxable Provident Fund for investors in the 20% tax band and above.

If you contribute more than Rs 2.5 lakh to the VPF per year but do not have a PPF account, you can open one right away. The PPF will collect 7.1% tax-free returns, compared to 5.85% in the 30%  tax bracket and 6.8% in the 20% tax bracket for Provident Fund. You can open a PPF account online with some banks, such as HDFC Bank and ICICI Bank. Since the PPF has a Rs 1.5 lakh annual investment quota, it cannot fully replace the VPF. Furthermore, if government bond yields continue to fall, rates will fall in the future.

And interestingly if you invest in PPF month on month then it is best to contribute by the 5th of every month as the interest calculation is done on the balance on that day of the month.Also, there can likely be a case that after the political reasons due to which the small savings rate cut was reversed, may still propel the government to again reduce the key small savings rate. So, better to lock in investments at a higher return.

financial tasks

4. Invest in small-scale savings plans.

The government reversed its decision to cut interest rates, giving investors in small savings schemes some relief. However, since government bond yields have been on a downward trend for many months, the rates are likely to fall. Current investments in the PPF and the Sukanya Samriddhi Yojana would be impacted if rates are cut. However, the rate will not adjust in many other schemes, such as the Post Office Monthly Income Scheme, Kisan Vikas Patra, NSCs, and Senior Citizens’ Saving Scheme, until the end of the term. It’s a good idea to lock in these schemes’ current rates before the next round of rate cuts.


5. You may also contribute more to your EPF:

You can also increase your employee contribution if your wage increases or your discretionary income requires it. But keep in mind that there is a new tax restriction in place for EPF as of this year. Any donation to a PF account that exceeds Rs. 2.5 lakh in a year will now be subject to taxation. To take advantage of rupee cost averaging and to get your investment up to par with your salary increase, consider increasing your investment in other financial assets such as SIPs. As a result, you will be able to achieve your long-term financial goals early in life.