Start these tasks in April to set the right course for the new financial year

It is the start of a new financial year and one of the first things you should do is to plan your money matters now, rather than keep it till the very end. Planning your finances at the start of the year ensures that you make sound financial decisions and are not stuck with the wrong products just to save tax.

So, to set you on the right course, here is a list of financial tasks you should complete before the end of the April to remain money wise throughout the year:

• Submission of proposed investment declaration to your employer

At the beginning of every financial year, you are required to give a declaration to your employer about how much taxes you plan on saving via different investments and expenses. For most of companies, this has to be done by mid-April. This ensures that excess tax is not deducted at source (TDS) from your salary.

After submitting your investment declaration to the employer, do keep a copy of it. You can use it as a checklist when you have to provide actual investment documents to your employer.

• Make tax-saving investments for the year

It is important to provide your investment declaration, but you should give equal weightage to saving early as well. Starting at the beginning of the year will allow you enough time to choose tax-saving investments wisely and it will make sure that you don't end up with the wrong product, for all the wrong reasons.

Another advantage of starting early is that you will get the benefit of interest for the full year. A person investing a lump sum amount in the first five days of April in a Public Provident Fund (PPF) scheme will earn more than someone who will invest the same amount in the Post March 5. This is because he will be able to receive the interest of the whole financial year by depositing money in the first five days of April.

Interest accrued on PPF is calculated on a monthly basis on the minimum balance between the fifth day and end of the month, but it is credited at the end of March.

Similarly, if you want to invest in an equity-linked savings scheme (ELSS) to save tax, you can do it either via lump sum or systematic investment plan (SIP). Most financial advisors recommend that you invest via the SIP route instead putting in a lump sum. This way, you will get to benefit from rupee-cost averaging.

Further, if you want to invest more than 12 percent in Employees' Provident Fund (EPF) as well as avail tax benefit under section 80C of the Income-tax Act, 1961, you can do this by giving a mandate for Voluntary Provident Fund (VPF). The rules governing EPF and VPF are the same. Most companies allow employees to give this mandate in April or October. Do it early, if you wish to opt for it.

• Submission of Form 15G/15H

If you believe that interest earned from your deposits (savings account, recurring deposit, fixed deposits) with bank in FY 2018-19 will be more than Rs 10,000 (Rs 50,000 for senior citizens) but your gross total income is estimated to be below the basic exemption limit (Rs 2.5 lakh), then submit Form 15G (Form 15H for senior citizens) to your bank to avoid TDS.

If the bank cuts TDS, then you will have to file income tax returns (ITR) to claim the refund since you are not liable to pay tax.

• Check form 26AS and tally your TDS credit

Before you start filing ITR, check that TDS deducted from your income by your employer or any others such as banks is reflecting in your Form 26AS. One can download Form 26AS from the income tax department's e-filing website and tally it with the TDS certificates to ensure that it matches. Click here to download yours. (link: https://www.incometaxindiaefiling.gov.in/home)

• Use your bonus wisely

If your company gives out a bonus in the month of April or May (after the appraisals is over), then, instead of spending it, use it judiciously either to reduce your debt (for instance, prepay or part pre-pay a loan) or invest it towards a financial goal. However, before investing, look for the time horizon for which money will be required to fulfil the goal. Investing in a product that matches with your time horizon ensures that you get the money when required.

• Review your investment portfolio

Do a thorough review of your investment portfolio and see if you are on the right track to meeting your goals. If you do get a salary hike, use that extra money wisely. If you are falling short, use the hike to fund for your existing goals. If all you are on track, use the additional money to invest for new goals.

You should also review your insurance needs. Ensure that you have sufficient health and life insurance coverage to cover all unexpected emergencies.

• File your ITR before the deadline

From this year, there will be a penalty on filing of belated ITR. According to the newly inserted tax laws, if the ITR is filed post July 31, 2018 but before December 31, 2018, a penalty of Rs 5,000 will be levied along with taxes and interest payable, if any. If the return is filed after December 31, 2018 but before March 31, 2019, then a penalty of Rs 10,000 will be levied.

As a relief to small taxpayers earning not more than Rs 5 lakh a year, a maximum penalty of Rs 1000 will be levied on them for belated filing of ITR. If, due to any reason, you missed the July 31, 2018 deadline, do file it before March 31, 2019. This is because post March 31, 2019 you will not be able to file ITR for FY 2017-18.