With the onset of the new financial year 2017-18, you should also get prepared for some changes in the income tax rules. The government has already taken several steps to promote digital payments and several other schemes launched by the government have paved the way to save more money.
Now it is you who have to make the best use the schemes by doing proper planning and managing your income and expenses during this year.
A few things you need to consider is whatever you are planning to save per month, make sure that you are timing it well by linking it to your future financial goals. Here are 10 things which can help you become rich this year:
1. Digital savings will help you earn more interest
The new initiative by the government to go for digital payments, in turn, will make you save more money digitally and earn good returns. Must you haven’t thought yet? Yes, it will happen because the cash in hand never earns a return, but the cash at the bank does. Since you can not keep more than Rs 2 lakh in cash, all your money will remain deposited in the bank only, because of which you will automatically earn higher returns quarterly, semi-annually or annually as per you bank’s guidelines.
2. Proper tax planning will help you save more money
The tax rate for employees who are earning a salary between in the range of Rs 2.5 lakh to Rs 5 lakh has been reduced to 5 percent from 10 percent earlier. Now one is liable to pay only 5 percent tax on one’s income in this category. Further, one can save up to Rs 12500 as per the amended tax rates proposed in the new finance bill this year. Moreover, employees earning up to Rs 3 lakh per annum need not have to pay any tax.
3. Proper real estate planning can help you buy new home
It is a time to build an asset for yourself. After the demonatisation phase, the government has given much relief to homebuyers. Banks flooded with cash have reduced their home loan rates. Semi-annually MCLR rates went down to a much lower level. People interested in buying a new home should buy because they can claim tax deduction up to Rs 2 lakh on home loan interest under section 24 of the I-T Act. Similarly, the principle amount can be claimed under 80C deductions for up to Rs 1.5 lakh. One can also withdraw money from EPF to purchase a new home for oneself.
4. Make proper use of credit cards
Following the digital transactions route and going cashless through credit cards no doubt is one of the better options, but one should ideally use it under proper control. A credit card gives you credit limit which is approximately 2 to 3 times above your salary. Therefore, one should not get much excited about this because at the end you have to clear all dues by yourself and along with heavy monthly interest.
5. Do not file late ITR
If you fail to file your ITR on time, you may lose money by paying penalty. You will be liable to pay a fee of Rs 5000 if the return is filed after the due date but on or before the 31st of December of the assessment year, while in any other case, a fee of Rs 10,000 will be payable. However, in a case where an individual’s total income does not exceed Rs 5 lakh, the fee amount will not exceed Rs 1000. Therefore, one should keep a track on filing returns from the assessment year 2018-19 as the amendments will take effect on April 1, 2018, and accordingly it will apply in relation to the assessment year 2018-19 and subsequent years ahead.
6. Make small investments towards retirement planning
The mutual fund market is growing at a fast pace. It is the right time to invest for a longer term and built a huge corpus for retirement. Long term investments will help you multiply your money at a faster pace. Suppose, you are planning to retire from the working life after 25 years and have decided to save Rs 5000 per month from today till you attain your retirement age. Then after 25 years, you will be able to generate a corpus of approximately Rs 1.65 crore (assuming the rate of return at 15 percent). However, there are other investment avenues available in the market in which you can invest your money and earn good returns at the time of retirement. But if you haven’t thought of it yet, you must start investing your money from today.
7. Proper budget planning will help you save more money
Unless you have planned your household budget properly, you may not be able to save money for any of your future financial goals. Be a smart saver before becoming a smart investor. Plan your daily expenses and calculate it monthly. This will help you in inculcating the savings habit within yourself. Also, you will be able to know exactly how much can you save per month after meeting all your expenses.