The new fiscal year 2022-2023 is upon us. If you're trying to get focused on your finances, performing specific tasks before the start of the new year can help you simplify your financial planning requirements.
Here are five things you should be doing at the beginning of the financial year:
Prepare your taxes now.
Many people complete their tax planning at the last minute and then invest in financial instruments that have a longer lock-in time or do not meet the taxpayer's risk profile. Thus, planning your tax returns before the beginning of the fiscal year is advised.
Check your investments
While it might not be possible to monitor your portfolio daily, a regular review of your investment portfolio and getting portfolio management services can assist you in understanding the performance of your investments. Reviewing your investment at the beginning of each financial year can aid in identifying those funds performing exceptionally well and those that have performed poorly compared to their competitors. It is possible to reconsider your investment in funds that consistently performed poorly compared to their peers over the last few quarters.
Learn about Tax Exemption Laws
Understanding the various areas of tax law can help you significantly reduce taxes. In Section 80CCC, you may benefit from tax exemptions. In Section 80C, you can benefit from the maximum amount of Rs.1.5 lakh to tax-saving FDIC, NSC, PPF, EPF, and ULIPs. Understanding these laws can assist you in choosing the best investment choice for your situation so that you can get the most savings.
Review Health Insurance Policy
As with life insurance, you must reconsider your requirements for health insurance. Due to the costs of health insurance and the exclusion clauses found in many policies, certain limits are required. Get coverage that is at least 5 lakh to cover your entire family. Consider if there are better options on the market. If your insurance isn't adequate, consider switching to a different insurer.
Review your asset allocation
Analyzing your portfolio before making any financial decision in the new fiscal year is crucial. Experts say the first step in portfolio management is often asset allocation. Adjusting your portfolio when there are significant market changes is necessary.
Review your Life Insurance needs
The life insurance you purchase must keep growing. Losing a spouse's job or having children will increase your burden and make it necessary to purchase more life insurance. Make sure that the amount of the loan is sufficient to provide the monthly income for your family members, pay off all outstanding loans, and save enough to cover one-time expenses, such as weddings and children's education.