Get Set Go... To File Your Taxes

Another financial year has just got over and it is now time to pay your dues to the government for all your earnings and fulfill your duties as an honest taxpayer. Be prepared with the given checklist to submit your e-filing by your own or even if you have someone to file your taxes, the list would be handy for all. Read the list and pass it on to your family, friends and colleagues. Don’t delay the process of filing taxes. Also don’t shy away and delay to collect the required documents.

The checklist of documents required to e-file your returns:

1. PAN CARD- Your identity for Income Tax authority is protected by the unique identification number provided in the PAN Card. It is necessary to use that number to file your returns. Also, if you are filing your own returns, the Pan Card number acts as your user name for login.
2. Form 16- It is applicable only to salaried people. It is a statement showing the details of TDS deducted by employer. It also shows the various deductions, exemptions and other calculations made by the employers.
3. Form 26AS – it gives information about the tax deducted and deposited against your PAN identity by your deductors. The same shows a summary of total tax paid under your PAN in the last financial year. It can be downloaded from IT website. Also, major banks provide a link to FOR 26AS.
4. Savings Bank Statements – the same is necessary to calculate the total income derived from your savings interest and Fixed Deposit interest income. The savings interest across all your accounts is claimable as deduction up to Rs 10000/- under Sec 80TTA. It is necessary to give details of all your savings accounts even if there are no transactions in the same. If you miss out on any of the account it can amount to tax evasion.
5. Property Details – if during the previous year, there has been any property dealing – you have to mention the same. Also in case of sale of property if there has been any profit on sale of property, it is necessary to calculate short or long term capital gains.
6. Home loan proofs – in case if you have any home in the last financial year, it is necessary to get the necessary interest certificate and principal repayment statement from the lending body. The principal repayment can get you benefit under Sec 80C and interest paid can be claimed under Sec 24 of Income Tax Act.
7. Investment proofs – keep ready all investment proofs ready as mentioned in Form 16 issued by employer and if otherwise, additionally invested under Chapter VI A. the list could include something like below:
   1. Life insurance premiums receipts
   2. Health insurance receipts paid for self, family, and parents
   3. ELSS (Mutual Fund) investments made
   4. Contributions to PPF/EPF
   5. Premiums paid for any annuity plans
   6. Receipt for school fees paid for children
   7. Bank statement for the principal of any home loan taken
   8. NSC bonds
   9. Tax saving bank FD or similar deposits receipts.
   10. Contribution to pension account and NPS
   11. Donations allowable under Sec 80G
   12. House Rent paid for amount beyond HRA received from the employer.
8. Business professional earnings – if you are a professional or any freelancer or running a proprietorship firm then it is necessary to collect the necessary proofs of your income receipts like bills – credits etc. Also, make a profit and loss adding to it all the office running expenses, utilities bills and even your travelling allowances.
9. Advance tax challans – keep handy all details regarding the payment of any advance tax or self assessment tax to be mentioned in the form.

Once, you have set across the required papers in place it is possible to simplify the process of filing your tax returns online.

Your tax Slabs For individual & HUFs

 

Thanks and Regards

Team

Saarthi Financial Planners

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Email: saarthifp@gmail.com

Your Personal Financial Role..

Before you Leave...

An individual decides to leave his home country and go abroad, for a better future for his family, better work and career opportunities or even to gain better exposure to facilities to exploit one’s skills. It can be simply aimed at higher earnings in a better currency. If you are also thinking to do so in near future, there are a few financial nitty-gritty’s you must take care before you fly away.

Change your bank accounts:

Before you pack your bags, it is mandatory to convert your resident bank accounts to non-resident ones. A Non Resident Indian (NRI) has three options-non-resident (ordinary) account (NRO), non-resident (external) rupee account (NRE) and foreign currency non-resident account (FCNR). Read more about these accounts in our blog link at http://saarthifp.com/blogs/index.php/faqs-about-nri-non-resident-indian-accounts/

 

Update your KYC details:

It is preferred that after changing the status of the bank account to update your know-your customer (KYC) details in all your share, mutual fund and insurance accounts.KYC compliance is a must to continue investing, buying insurance and opening/maintaining bank accounts.

Arrange Power of Attorney (PoA) to a person you trust:

It is also advised to provide somebody legal authority to make decisions in your absence. It can be related to your legal, financial or any other work in your home country.

This authority or PoA, as it is rightfully called can be of two types-special power of attorney, for a specific task, and general power of attorney, which authorises its holder to do all that is necessary (simply put it just act like you).

Open a Portfolio Investment Scheme:

If you intend to continue investing in Indian shares even after settling abroad, the only way you can to do so is by opening a portfolio investment scheme (PIS) account with a bank. You can have only one PIS account. There are various limitations on the NRI investors on share trading which would be made available by the broker.  Every PIS transaction is monitored/reported by/to the RBI.

Clear loans and other outstanding bills

If you are leaving behind assets like real estate in India, please ensure that you give ECS mandates to pay off the electricity, gas bills. Also, if there is loan component on the property, EMI should also be rerouted on this way.

Don’t forget to add your premiums for life policies or mutual fund systematic investment instructions. Please make special note especially to transfer these instructions to your non residential accounts.

Insurance Policies

It is better to surender your general insurance polices like your motor and health insurance and buy a fresh one in your new country of residence. It is advised to continue your existing life cover till you get a fresh one from the local insuring company in your new residence. Please ensure you verify that your insurer covers the life term in your new country of residence.

NRIs are not allowed to invest in small saving schemes like Public Provident Fund and National Savings Certificate but they can hold them till maturity. Even the banking products like Fixed Deposits are required to be closed on maturity. You can book a new FD at varied NRI rates.

Taxation clarification 

Even if an individual moves to another country, he is liable to pay tax on any income that is generated in India. India has signed treaty of Double Taxation avoidance Treaty with approximately 84 countries. This means the individual doesn’t have to pay taxes twice. The non resident benefits from lower TDS rate, exemption limits and tax credits. For example, if an individual submits proof of his residency in a particular country with which India has signed a DTAA then the income generated in India will be taxed at the rate mentioned in the treaty.

Beyond this there are many small things you should ensure that you deal with like bank lockers closure – if you are going to come back for few years or you have not assigned anyone in India to operate it. Also, take of all your physical documents, secure your will or list out your assets in nomination for any untold event. Be prepared with a minimal fund to survive in case of unplanned comeback. Plan these things in as detail as you have planned your journey. Be relaxed on your home front responsibilities and enjoy your life at a new place.

Thanks and Regards
Team
Saarthi Financial Planners
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Email: saarthifp@gmail.com

O Womaniya… Jee le Zaraa

 

“Every day I wake up, I long for a small break for the coming weekend. With a toddler to manage and flourishing business to care for, every small break makes me feel awesome. However, the reality strikes too soon to wake me up thinking how will I meet my expenses for my vacations and more relevantly my living expenses. I mean yes my spouse is earning good for us but what I am talking about is the icing on the cake -- my earnings which is now not there. My income cycles are irregular now. I miss my independent earnings”. Sounds like a familiar problem? Yes, every women going through midlife professional sabbatical or pregnancy pause can relate to it. What we would discuss today is what you can do to avoid such situation in case to avoid possibly lost individual earning capacity.

Plan your break well – decide on the time you want to take a break for. If it is for a temporary health break then it is wise to talk to the company HR for giving you a short term sabbatical. If you want to take a maternity break then it is best to talk with your spouse and your immediate regarding the likely time to resume work. The main purpose of this planning is to ensure that you save sufficiently well for your interim contingency funding. Also, if you don’t wish to resume work for a short time then it is best to re work your personal cash flow to understand the discretionary components that can be discarded.

Make a note of all your upcoming major expenses – be it any health consultation, surgery or general hospitalization. Make note of all of these expenses. Also, if you intend to travel in the break it should be planned well in advance to avoid any huge cash crunch later. These funds should be beyond the basic safety required to be maintained by you. Also it will make your spouse tension free about shouldering the responsibilities single-handed.

Continue your individual investments – all the savings ongoing for future goals should be continued without any inadequacy in it. This should be taken at the time when you are still working. If you want to transfer the funding from your joint pool with your spouse then make necessary bank transfers regularly. Also, never miss your life premiums as it is necessary to continue your life cover.

Keep your personal expenses self sponsored – make your personal lifestyle expenses self sponsored so that you don’t have to compromise on it. Let it be well calculated to ensure that your grooming or lifestyle expenses don’t compromise anywhere. Also, please don’t make it too overstretched to make you feel bonded to fulfill it.

Support your family goal funding – if you have decided to retire from your active work life, then plan this retirement well in advance. It is necessary to ensure that your family goals are not hampered at any cost. If your family goals need you to support a little more then try to figure a mid way to balance your expenses and earnings.

Saarthi supports women’s financial literacy and independence. We look forward to get more female clients planning for family goal fulfillment. It is necessary for women to play an active role for family financial welfare. But this should not hamper their own dreams and goals. Be a bird, carrying your own weight and be you own anchor.

Thanks and Regards
Team
Saarthi Financial Planners
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Email: saarthifp@gmail.com

Plan your longevity..

One of the important premise on which retirement planning is undertaken is calculating life expectancy. Above all things only death is certain and inevitable. But at times, death may delay its plan and life takes a new turn and leaves you with multiple queries. We encountered many such queries from our clients in our recent interactions leaving them with a thought if they have really saved enough. As a financial planner we calculate the corpus considering all cautious return rates and highest inflation rates. But at times, these calculations also can fall short to actual life.

So if you face a situation where the actual life span exceeds your expected life calculations, then it is wise to take a precautionary move a few years before the D day. So here are few things we suggest to modify the existing planning.

a)   Seek exposure in Equity – Whenever you devise plan for retirement ask your advisor to recommend some component investment in equity. Equity is useful tool for capital appreciation. If you are currently retired then seek to reshuffle your portfolio with partial exposure in equity. But give it tenure of at least 5 years. Also, seek funds which have smaller AUM as it gives scope of fund improvement.

b)   Don’t fight way to reduce expenses – Retirement is rightfully called as golden period and it will be wrong to cut short your expenses to meet the survival. Also, it is not just about surviving it is about living this time. If you need to add to corpus then always look towards your net worth. Fight out the unproductive assets like jewels, or expensive art. If you had planned to pass it on to next generation for lineage fame – leave the glossiness and get practical. 

c)   Be frugal and not a miser – there are many times that we have hoarded things around which are not of any actual use to us. So it is time to get a junk sale arranged for it. It would save you the pain of getting any additional space for preserving it and also arrange for some quick liquidity. It is not a long lasting solution but a temporary fix. 

d)   Rejig your inheritance plan – beyond your love and care, all that your child gets depends completely on your own wish. So, if life has altered its plan then even you need to make the necessary tweaks in your thinking. It is not necessary to leave back all your created wealth for your children. Let them feel the heat and struggle before you put them in a comfortable padding. Figure out all the usable capital market instruments that you can you use with regular income generation if possible without harming the capital invested. Like try dividend mode over growth or interest payout or start to make your 80C investments in ELSS over PPF. 

e)   Use lifelong annuity – Annuity payments are ideal for regular income when one is not making regular money. So whenever you buy an annuity program from any insurance company ensure you select the mode of lifelong annuity in it.

We would just like to conclude that every situation that seems like a dead end pans out into a new adventure ahead. So, keep watching for that blurred light of hope in your difficult situations. Also, a plan can be modified at any level 

Thanks and Regards

Team

Saarthi Financial Planners

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Email: saarthifp@gmail.com

Nurture your Investments

The recent victory of the ruling party over one of the largest state is no less win then the overcoming the cli9mb of difficult Everest ranges. This win is not simply a win of majority but it also shows that now people want to give a chance to new people and move away from their comfort zone. News, rallies and speeches now do not attract people, they want results. This midterm victory of our PM’s tenure is a clear reflection of how people now believe in the decisions made the commander in chief of our country. It all started with parties canvassing, leaders speaking and tarnishing image of the other one. All said now is the time to perform. But again it is not a task of few days or months. It requires continuous efforts till the things really change. Apparently when we talk of our investments, we also follow the old dictum “Start, put the vehicle in 1^st Gear and as soon the vehicle picks up speed move to 2^nd gear. As the road gets smooth keep on shifting the gear”. But what we miss in this high is that the road can even get bumpy and the ride needs to be made slower and safer to cross these roads. So, why am I today discussing so much about these things that we already know or read every day in our morning newspapers? What is the need to reiterate the multiple times repeated stories? Well to begin with is that if you know them then why don’t we apply it? Apply it in our personal decisions – be it personal life or financial decisions.

Yes, we at Saarthi, want our readers to first improve their financial common sense before they plunge into analyzing and judging Ratan Tata and his personal investments. Why do we make statements on what Narayan Murthy comments about his peeve subject? Yes the very common thread that underlies in all my above comparisons is one point – Give time to your investment and wait for it to do the best. However, if you don’t see what you expect, don’t pluck it rather take utmost care of it and efforts to let it survive the rough times. As any leader needs time to prove his vision and efforts or every car needs to adjust to the road bumps so does the investments need time and still belief in its merit to survive the time tide. If you believe the invested asset class then it should not be difficult to understand the reason for its bad performance. It not only applies on variable earnings of products but also on fixed earning products. Any positive news should not make you turn towards any specific product nor should it make you move away from it. Before you leap to make any decision take advice on it to double check strength of your action. Be sure you don’t turn to machines and TV commentators for this. Use somebody like your personal advisor, to give you an honest opinion.

All said it is good to be patient with your investments. It may be able to survive your ignorance but cannot face your harsh decisions. So, always never fear to take a chance. “Chance is always second last.” If you don’t believe me then just think if all options were 100% then would there be any word like “Probability”

Thanks and Regards
Team
Saarthi Financial Planners
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The heart of gold

Many times my father becomes subject to my mother’s annoyance over his out of way help towards unnecessary people. It is surely a noble thought to help someone out of his problem but at cost of oneself is not advised. Even when you travel by flight the attendant very clearly says, “In case of lack of air, first wear your own oxygen mask and then help others.” Of course it is not to stop anyone from helping others but always your safety gear on. Even when one company comes over to takeover another company it comes with an agenda to ensure its profit and success. Hence, if you are in line of this social service too then be careful. Hold your horses become you spill over your entire finances over others. Sometime it is better to tread slowly rather falling over long run. Today, we would discuss a few pointers so that you can balance your heart and head well.

a)   Block your funds- it is best left to earmark a fix amount of funds you want to spend on your public chivalry. It would help you understand the line to tread further once you reach the threshold. Also, the limit will give you a head count of your efforts provided. 

b)   Donate only to known- Every big charitable trust that sponsor the needy people, conduct a primary research on the people they help. So, when you do so at personal capacity, it becomes imperative for you to study well the person you trust your money with. So, follow the simple dictum of helping only your known acquaintances.

c)   Prefer the mortgage route- Although, you might not really help someone with the intention to get back your funds, it is always preferred to take a mortgage against the loan. It is not to pressurize the lender but to ensure that he works in good faith to return the funds. 

d)   Form a public trust – in case if you want to engage in regular activities of charity and monetary help, it is better to form a public trust. It would give you an additional leverage of tax benefits and other savings.

e)   Bring your family in confidence- never indulge in secret act of funding any individual without making your family aware about it. If the times change, then this lent money could also give them some relief for survival. 

Just summing up, our discussion we would just like to say that although unconventional lending is very popular in India it should not come at the cost of your financial goals.    

hanks and Regards

Team

Saarthi Financial Planners

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Email: saarthifp@gmail.com