Plan your tax returns throughout the year
The end of the first quarter of a financial year usually sees people from different walks of life scrambling to file their tax returns.business Updated: Jul 21, 2008 22:32 IST
The end of the first quarter of a financial year usually sees people from different walks of life scrambling to file their tax returns. Though the returns that are being filed are for the last financial year, one must begin to plan for the current year to maintain the momentum of your financial goals.
An early start
Many people make an early start by making some investments in the month of April itself. This also looks good because steps completed in the first month lay the ground for an early completion of the process. However, in many cases a good start is followed by a slack period later in the year, which brings the entire investment process to a grinding halt for several months.
It is during this period that some money must be invested regularly to keep the process going. Such intense efforts might seem to be unnecessary at this stage but it plays a big role in making the entire process easier over the year.
Lock yourself in
One of the easiest ways to complete this task is to sign up for some investments that will take place regularly each month. The provident fund deduction from salary happens automatically but for many people this is not present because they are not salaried or it is not enough to complete their tax requirements.
To get around this they can fix some investments where one needs to put in a certain some of money every month. This will ensure that the investors will not be impacted as far as their savings is concerned because there is no halt to the entire process. It also eases the pressure to invest in the final months.
Changes in external factors also help in making financial decisions for the investor. For example a sharp fall in the market as has been witnessed in the last few months will make buying equity linked tax saving options attractive for the investment return.
This can prove to be a double gain for an individual because he or she can get the tax benefit from the investment and can also look forward to chances of a good return. This can also prove to be a case for the investor making their investment in the middle of the year rather than wait for the end period.