The year 2020 may have just begun, but the time to draw the most important date sheet of the year, the one dealing with all your financial decisions, is running out very fast. Unless prompt decisions followed by decisive action are taken now, you will not be able to make the most out of your money matters. Like any other sphere of life, planning well for your money will not only make your money work better, but also last longer.
Good financial planning brings you a number of benefits:
- First and foremost, it brings you peace of mind. You are able to get a bird’s eye view of how much money you have and where do you want it to go.
- Second, a good financial plan allows you to save money to the maximum possible extent, which makes you prepared for any eventuality or emergency that may occur in the future.
- Third, good financial planning allows you to lead a comfortable life. By gauging your expenses in advance and spacing them according to your income, you will never live in want of anything.
- Fourth, sound financial planning allows you to make the most out of your investments, including allowing you to build a diverse portfolio of savings and investments.
- Fifth, with proper financial planning, you will be able to get real advantage of money. As an example, by having enough money saved for your expenses, you will be able to charge them on Credit Card and pay them in full when your card statement is generated. You can earn interest on this money as well as reap rewards from Credit Card by clearing all your dues in time.
Let us now look at your financial date sheet for 2020: This consists of two immediate action items and multiple specific items that are mapped to certain deadlines based upon previous years of government tax calendar.
- Day One- Draw a Budget: This is the very first step you should take. Draw a budget by taking stock of all your investments, expenses, and incomes. Know how your money is flowing. This is your primary building block on which your entire financial structure of the year 2020 will be built. Ensure that you allocate money to all important channels, including your loan instalments and your living expenses, and identify which expenses are unnecessary and should be cut off.
- Week One- Get Insurance: Getting insurance might not seem like a very good idea for someone who has just built up a budget, but keep in mind that every moment you spend without adequate medical and life insurance, you are putting yourself and your family to unnecessary risk. Besides the fact that the premium you pay for your insurance, both medical and life, is deductible for income tax calculations. You can sleep with peace in mind that in case of anything untoward happening to you, your family and loved ones will have appropriate provisions for a comfortable lifestyle and your children will be able to get a good education.
- March 31, 2020: Do all income tax saving investments. This is the last day of the financial year. All income you get till this day will be taxable in this financial year. If you want to make any income tax saving investments, like Tax Saving FDs, Equity Linked Saving Schemes, Home Loans etc, they have to be done by March 31, 2020. If there is even a delay of one day, the investment will only be counted for next assessment year. So, all tax saving transactions must be dated on or before March 31, 2020.
As a bonus tip, if you are expecting any income on or near this day, try to push it till April starts. This will mean that you will not be required to count this income in this financial year but the next one.
- April 10, 2020: Get a PPF account and put as much money in it as possible. Opening a PPF account and putting money in it is one of the best long-term financial decisions available to all citizens of India. It is the safest kind of tax-sheltered investment with no taxes on contributions, interest earned and withdrawals. While you can get a PPF account at any time of the year and make investment to it as per your convenience, depositing maximum money by April 10 will get you the maximum interest on your PPF account.
- July 31, 2020: File your income tax return. Simple and easy – July 31 is the last day to file your income tax return. With online income tax return filing now becoming the preferred mode for most of income tax payers, the process has become very simple and fast.
- September 30, 2020: Online return filing acknowledgment to be sent to CPC through mail or online. When you file your Income Tax Return online, the income tax department requires you to also send in an acknowledgment related to the same. For most people who have their Aadhar number and PAN number linked, the process is very simple. The income tax website allows OTP based acknowledgment where you get an OTP on your registered mobile, and by submitting it, the process is considered complete. For other people, a print of the acknowledgment sheet that has been emailed to them has to be signed and mailed in hard copy to the CPC of the Income Tax Department.
- December 31, 2020: Do all income tax saving investments for next year. As said earlier, it is never too late to start saving money. Most companies want their employees to be done with their income tax saving, investment, and submit appropriate proofs by the last calendar day of the year. If you stick to this deadline, you will not be charged extra income tax and will not have to worry about asking for tax refunds when you file your return.
Always keep in mind that self-discipline is the key to financial success, so stick to this date sheet.
Also Read: 5 Financial Planning Tips for New Home Loan Borrowers
To apply online for Home Loan, Personal Loan, Credit Card, Business Loan & LAP visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 100+ Banks and NBFCs. We have served 7 million+ happy customers since 1989.