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4/1/21

Avoid becoming a financial April Fool this year, start planning investment for the new year today

Beginning of the new financial year:Avoid becoming a financial April Fool this year, start planning investment for the new year today






April 1 i.e. the new financial year 2021-22 has started from today. It is customary to make April Fools on April 1, but in this new financial year you should avoid becoming a financial flower. According to Harshvardhan Rungta, CFP and personal finance expert at Rungta Securities, this time you should start financial planning from April. Getting started early can not only save you tax but can also help you meet your financial goals.

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It is also important
to take risks. People always avoid investing money in market related options to avoid risk. Even though options like Equity Linked Savings Scheme (ELSS) offer higher returns than PPF, Tax Savings FD or other Post Office Savings Scheme, old-fashioned investors want to stay away from it. Apart from the tax benefits available on ELSS under Section 80C of the Income Tax Act, this option gives a higher return than the long-term inflation rate.





Starting investing as early as possible is
another big mistake of taxpayers who always look for an investment option to save tax at the end of the year. There may be some wrong decisions in the midst of this rush of tax planning in the recent past, which makes it more likely to choose the investment option that gives a lower return. Failure to submit proof of your investment at the last minute in a hurry or on time may result in delay in receipt of payment, which may result in the taxpayer not actually getting the benefit of tax evasion.


Investing at the beginning of the financial year gives you a return with tax savings
as well as investing money together in the last quarter of the financial year can save you tax but you do not get the return from this investment. It is therefore advisable to plan tax savings at the beginning of the financial year. Because, it will give you double benefit of saving tax as well as getting year round return.

Suppose you invest Rs 1 lakh in ELSS to get tax exemption. But if you make this investment in the last month of the financial year i.e. in March, you can save tax on Rs 1 lakh by investing in it but you will not get the return of 70 to 80% given in this scheme. That means by investing at the right time you can earn a profit of 70 to 80 thousand on 1 lakh.

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Combining insurance and investment
People who pay the wrong taxes always make the mistake of combining insurance and investment. Such people want to invest in an endowment, money back policy or ULIP. Such a product neither gives you adequate insurance cover nor a decent return. It also has a lock-in period of 5 years. As well as products like pension plans are in lock-in till your retirement age. It is therefore advisable to keep insurance and investment separate when planning tax savings.

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The main purpose of buying a life insurance policy should always be to provide financial security to your family in case of your untimely death. Term insurance is a good option for you as it gives you 10-15 times your annual income cover at a lower premium.






The aim should be not only the tax saving investment
Kedia advisory director Ajay Kedia said, as a general rule you under ELSS, PPF or NPS, including other investment options should only be a place to see the benefits of his tax returns, liquidity and risk comparison. By doing this you will be able to get a decent return along with tax savings. It will also help meet long-term goals, such as raising money for retirement and raising money for children's studies. Before investing, you should understand that the main purpose of investing is not to save taxes but to earn a good return.

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