THE start of the financial year means that there are several areas that need to be tapped for various financial activities. An early start ensures the working over the entire year is undertaken smoothly. This requires some homework to be done so that there is ease of operations and that the individual knows precisely the areas that he needs to concentrate and work on. Here is a look at some of the areas that will require attention.
Investment declaration: The first thing that a salaried individual has to do is to give the investment declaration for the present financial year to their employer. This has to be given as early as possible so that the accounts department in their organisation is able to incorporate the figures and then make the necessary deduction from the income earned by them each month. This is important because if there are various tax savings investments that are going to be made by the employee but this has not been intimated early in the financial year then the entire basis for the deduction of the taxes will be wrong. This will have a negative impact in the latter part of the year.
Tax saving investments: For the individual to be able to give the investment declaration he needs to be clear about the various tax saving investments that they will undertake during the year. This is the basis on which the other areas will work and hence the individual has to concentrate on this activity. This will involve determining the exact amount that has to be invested that will give them the required deductions and also get an idea about the areas in which the amounts will be directed so that they know the nature of the investment.
Start slowly: Apart from the actual planning and the intimation of the details this is also the time of the financial year when the individual can actually start the tax saving investment process.
In most cases, there will be quite a large amount that would have to be invested over the year and if there has been a lot of pressure on the finances for the month of March then the thought of the investments so soon is likely to cause an element of worry. However, there is a need to ensure that in the present year a similar situation is not experienced and due to this reason there has to be a start in the investment process right from the month of April. This can be done slowly so as to ensure that the pressure at the end of the year is not high.
Additional planning: The start of the financial year should not result in just planning on the taxation side but it should also cover the financial aspects that are beyond this. It will ensure that there is a specific manner in which the entire financial activities are being carried out and this will be helpful in completing the various long-term goals in a manner that is easy to understand and implement. The additional areas will cover things such as education planning for children or retirement planning and the position will vary across individuals so each one has to consider those areas that they feel is relevant for them.
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