With the New Year closing in, it is time to unwind and enjoy the end of the year with a peaceful mind. One of the best ways to attain perfect peace of mind is to keep all financial records well settled and up to date for the year gone by. A lot of people commit the mistake of opening up their financial records just a few days before the end of the financial year. Usually by that time it is too late to invest in any tax saving avenues. Making financial records up to date with the end of the year makes a perfect case for attaining perfect taxation strategy to help you maximize your profits and attain peace of mind. Here are some tips and recommendations to manage all your financial records before the beginning of the New Year.
Update Banking Accounts: Bank account statement play a major role in evaluating and updating your financial records. Instead of waiting till the last week of the financial year to update all personal and company’s banking accounts, the end of the year offers the best way to keep information up to date. The last week of December is usually spent lazing around enjoying the festivities. Taking out some time from the year end celebrations can make help update your financial records with a minimum of fuss.
Compile all TDS Certificates: Compiling all your tax deducted at source certificates gives you a complete picture of your overall tax liabilities. The end of the year is the best time to compile all such TDS certificates. If you are a salaried professional make sure to keep copies of all your tickets in case you have planned a travel this festive season. Employers will not deduct TDS (tax deducted at source) on your leave travel allowance as long as you submitted essential documentary evidence in time. Since almost every company asks their employees to submit their investment declaration between December and middle of January, it becomes all the more important to compile all your financial information by December to avoid any last minute jitters.
Check out Your Tentative Tax: Once you have compiled all your financial records and account information, it is a good idea to do a small tentative tax calculation. Such a calculation can underline the need of any last minute tax saving investment that can be useful. Any extra funds that you may have after evaluating your tax related expenditure can then be wisely used in retirement planning or other essential tools.
Evaluate Your Taxation Strategies: Evaluating your taxation strategy before the end of the financial year is one of the best financial habits to cultivate. Irrespective of whether you are a salaried professional or a business man, self evaluation of taxation strategies gives a great insight into any last minute tax planning that can help you save some tax as well as increase your chances of having a better financial portfolio.
Explore Various Tax Saving Instruments: Once you have evaluated your taxation strategies and have a fair idea about your tentative tax amount for the year, there can be scope for some last minute tax saving strategies. From investing in purchase of capital goods in case of a business owner to donating money for a charitable cause under section 80G of the income tax act that can avail some deductions to investing in pension funds, there are various options depending on your personal financial record. Compiling all financial records latest by last week of December gives ample time to explore all such tax saving instruments that can help you attain better financial health and well being in the long run.