To boost the preparedness to battle Covid-19, PM Modi asked Ctizens to donate in the PM-Cares as per their bandwidth. No Doubt, these are rough times, and we need to band together. Covid-19 has been named the first Pandemic (hopefully the last) of this Decade. Sensing the looming threat, FinMin announced India’s ‘Economic Package’ worth INR 1.7 Lakh Crores. However, several Economists commented on the ‘Economic Package’ that India needs three times the amount to battle Covid-19.
Unsurprisingly enough, Several High Net worth Individuals/Organizations like Bollywood Celeb Akshay Kumar and the TATA Trust have pledged their resources to fight Covid-19.
In PM’s monthly address on his show, Mann Ki Baat, he appealed to the Citizens to Donate as per their financial capabilities. And many Individuals have risen to the occasion. Not just the HNIs, but many middle class Individuals have also Donated.
And it is easy to forget that under Chapter VI A, there is a clause that allows Individuals to claim Deductions while Donating u/s 80G. While it is important to know that there isn’t any upper limit to donate. As long as you have taxable income to claim deduction from, there is no limit on amount of deduction to be claimed u/s 80G. However, in case of cash donations, any amount donated in excess of INR 10,000 isn’t eligible for a Tax-deduction.
Note: If you wish to Donate in an International Organization, Tax-benefits u/s 80G aren’t available.
Remember, India has too many mouths to feed. And so the people who ‘Have’ need to help the ‘Not Haves’.
On March 24, 2020, FinMin Nirmala Sitharaman extended the deadline to make Tax-saving Investments up to June 30, 2020. Since similar extensions regarding Linking PAN with Aadhar and Belated ITR filing date were announced by FM, this announcement was also highly anticipated.
The deadline for Tax-Saving Investments has always been the last date of Financial Year, i.e March 31. Hence by this time, individuals who wish to claim a Tax Deduction of INR 1.5 lakh on their returns need to make investments under Chapter VI A.
…and comes the twist
So far 2020 seems like a sci-fi movie directed by Quentin Tarantino. And the worst part is that we don’t know if we’re past the interval or not. Coronavirus has caused nearly half the earth’s population to stay at home. Countries and Health care systems worldwide are scrambling to limit its spread and subsequently, find a vaccine.
But, there still existed complacency among countries and their attitude towards the virus. Hence, to increase awareness and boost the readiness, the virus was declared a ‘Pandemic’ by the WHO. Declaring a disease as Pandemic has symbolic importance. It means that the disease is spreading across borders and it requires immediate Global attention.
Expectedly, India responded quickly and went under complete Lockdown. Sensing the great extent of damage that Covid-19 can do many countries have declared ‘Rescue Packages’ to save their economies. Unsurprisingly, India followed suit and declared that an ‘Economic Package’ was soon to be announced.
Between March 24 and 26, Finance Minister Nirmala Sitharamn made several announcements. Some of which were:
Simply put, people get more time to make Tax-Saving Investments. Earlier, at this time of the year, people were prone to making hasty investment decisions in order to save on taxes. But since, FM’s announcements, we have more time at our disposal to evaluate our options.
Note: The deadline for Tax-Saving Investments u/s 80C has been extended. No clarification has been given for other sections under chapter VI A.
While the declaring Covid-19 as a Pandemic dictates that countries alter their approaches towards the virus. A trickle-down effect seems to have happened among the Global Markets.
The Hong Kong and Singapore Stock exchanges were first to plummet followed by the Stock Exchanges of Europe and Asia and eventually impacting Dow Jones and BSE as well.
As a result IMF chief Kristalina Georgieva claims that the world has entered Recession. She claims that this Recession is worse than the Financial Crisis of 2009. This meltdown of Global Markets can resonate with some individuals as investment opportunities. Mainly because shares of companies with usually high prices are available at a cheaper price.
Individuals wanting to invest in Stock Markets can claim a Tax-Deductions u/s 80C for the same. However, a level headed assessment of these investment options is necessary.
Off late, more and more celebrities and industrialists have donated funds to battle Covid-19. Inspired by these big names, many of us might also feel that helping the community is the right moral choice. And donations for the same could also increase. While donating serves a greater purpose, it has an additional perk attached, i.e Tax-Benefits. Yes, Individuals wanting to donate are also eligible for a Tax-deduction u/s 80G
The Covid-19 situation might make many individuals realize the need for Medical Insurance. Hence Individuals and HUFs can claim Tax-Deduction u/s 80D.
Many Economic pundits are claiming that with every month a country spends in Lockdown, the expected GDP for that year decreases by 2%. If that wasn’t shocking enough, the International rating agency Moodys further cut down India’s GDP for FY 2020-21 from 5.3% to a struggling 2.5%. If the prediction is accurate, savings and investments will play a crucial role to keep our economy afloat. So, this extended deadline for Tax-Saving Investments is more important that one thinks.
While we are bidding you good health, please stay home and stay safe. Until next time.
Due to the recent surge in Covid-19 cases, India has been kept under complete lock-down until April 14, 2020. Most of the companies have asked their employees to work from home. Since we are also working from home, we faced these common challenges- Why is work from home usually so difficult? and most importantly, how do I boost my productivity?
Turns out, work from home can be just as productive as working from an office. All it needs is certain interventions in your routine.
Chair > Bed
As tempting it may feel but beds aren’t the right space to work from. Beds are often ‘over-comfortable’ and contribute towards reducing your overall productivity. Apart from that, leisurely working in bed will result in body aches as well. Even at home, it is advisable to work in an office like setup by working on a proper desk and chair.
Having a desk and a chair to do your work will not only instantly boost productivity but also help to avoid the risk of body aches. Keeping the posture thing aside, your work from home space shouldn’t be from your bedroom. Working in your own bedroom sends mixed signals to the brain. Resulting in low levels of motivation and drive to work. This goes without saying, proper ergonomics can affect your productivity dramatically.
So prefer a desk and chair setup, in a different room than your bedroom.
(Over)Communicate
Even though it is easy to remain complacent while working from home, letting team members know about your availability and schedule is always a good idea. This way team members can know your exact status and more realistic goals can be defined.
However, it doesn’t mean that you write lengthy paragraphs defining your every move. That will work counterproductively and you could save your team from unwanted blunders.
Actively use video conferencing platforms, emails, texts and calls to communicate. If you’re an employer, things might be more difficult as you might have to set protocols in which communication is fluid and effective.
Claim Deductions/Reimbursement
Did you know that you could claim Tax Deductions while working from home? Given that you fall under the Business or Profession category.
Individuals having Business and Professional Income can claim Tax Deductions on expenses such as Electricity and WiFi in their Income Tax Return. Salaried Individuals are not entitled to Tax Deductions, however, they can claim a reimbursement from their employers for such expenses. Given that it is mentioned in the employee agreement.
Maintain Regular work hours
It would really help if you decide on a schedule and stick to it. Let’s be honest, we don’t work like we are supposed to when we’re at home. There are T.V breaks, afternoon naps and the most frequently happening ‘let me just check my Instagram for 1 hour’ moments as well. All these factors eventually hamper our productivity.
One simple yet difficult solution is to draft a schedule, a realistic one of course. Also don’t be too hard on yourself and create a schedule where in all you do is just work. Have timely breaks incorporated in the schedule.
Having formed the schedule, comes the most challenging part… Following it like the holy grail. It’s a matter of self-discipline, a virtue that no one can teach or incorporate. It has to be developed and polished by practice. Nonetheless, if done correctly, you will witness dramatic improvements in your work.
Ground rules for the family
We’re sure your family must be very happy having you around whole day. They’ll be looking to spend some quality time with you. Chances are that you might end up trading precious office hours for some heart-to-heart family time. Which is also very important, but not at the cost of work.
Even after having a separate office space and making a schedule, distractions could still hamper your work. To work effectively and meet deadlines, a distraction-free environment is necessary. So you need to set some serious ground rules for the family. And they need to be followed by you and your family.
This goes without saying but, make sure to spare some time for your family as well. Maintain a work-life balance.
Use Professional Tools
In an office space, you might be using several tools for the proper execution of your work. It is important to transcend these tools to your home office as well. What it means is to have all the credentials, software and permissions you need beforehand.
This will save valuable time not only for you but for your co-workers as well. Also, it could be useful if you research some tools that ease your work and improve co-ordination.
Tools like Trello, Google meet, Slack can help teams to function better.
We hope that this blog will help you govern your work from home better. Until then, stay safe, stay home and work hard.
Countries around the world have been implementing emergency tax relief measures to support their weakened economies in the outbreak of Coronavirus (Covid-19) disease.
Countries are considering tax relief measures because the health issue is creating a massive economic shock. Regular payment of taxes will impact the liquidity of businesses and households.
The governments around the world are considering fiscal relief as a way of minimizing the economic impact on health crisis.
As policymakers tackle this crisis, they should keep the following in mind…
The relief measures should be broadly defined.
The policies should be defined keeping in mind the long term benefits of the country.
Policies that include refundable tax credits should be designed in a manner that it would bring forward the future credits or deductions.
Policymakers should also use this opportunity to fix distortive tax policies that could impact recovery efforts.
The following are the countries (listed continent-wise) which have implemented or plan to implement tax relief for businesses and households affected by COVID-19:
The last date for filing Income Tax Returns for FY 18-19 extended to June 30 from March 31 due to the Covid outbreak.
Subsequently, all compliances under the Income Tax Act, Wealth Tax Act, Benami Transaction Act, Vivaad se Vishwaas, have been extended to June 30, 2020.
The last date for linking PAN with Aadhar extended to June 30, 2020.
GST –
The last date for filing March-April-May GST returns extended to June 30, 2020.
No interests, penalty or late fees to be charged for late filing of GST Returns for companies with Turnover of INR 5 Crore of less.
TDS –
Interests charged on delayed deposits of TDS reduced to 9% from 18%.
ROC Compliance –
Mandatory requirement of holding board meetings relaxed by 60 days, this relaxation is for the next two quarters.
Newly incorporated companies get an additional 6 more months to file the declaration.
(MSMEs) The threshold for default under IBC raised to INR 1 Crore from INR 1 Lakh.
China
China has reduced its Value Added Tax (VAT) from 3 % to 1 % for the cash accounting scheme for small businesses until the end of May. It also cut VAT on medical, catering, accommodation, hairdressing, and laundry services as well as on masks and protective clothing.
Japan
The country has delayed income, consumption, and gift tax filing deadlines and payments by one month, until 16th April, 2020. Further measures will be considered depending on how the situation evolves. The government has also temporarily eliminated altogether the 10 % consumption tax. Authorities have prepared a ¥30 trillion supplementary budget to address the hit to economic growth from the health crisis.
Indonesia
Indonesia plans to waive income tax for individuals for six months as it seeks to boost purchasing power. A second stimulus package will allow firms to delay payments of corporate and income tax on the sale of imported goods. These measures will be effective from April 1st and last for six months. Also, to encourage tourism to certain destinations, a 10 percent hotel and restaurant local tax will be lifted for six months, with the central government compensating local governments for the expense.
Thailand
The cabinet has approved cutting the income withholding tax from 3 % to 1.5 % for six months, from April to September. It also doubled the tax benefit for investment in long-term mutual funds to USD 12,570. Thai Cabinet also approves Phase One of Covid-19 stimulus package The package includes 180 Billion Baht (USD 5.7 Billion) of soft loans from Government Savings Bank and the Social Security Fund, Finance Minister Uttama Savanayana says in a briefing in Bangkok.
Malaysia
Malaysia is exempting accommodation services from services tax and providing sales tax exemptions and lifting import duties on equipment and machinery.
South Korea
The nation will cut its VAT for small businesses, give tax boosts for consumers replacing their cars early, and provide a new tax deduction on personal credit card spending.
Iran
In Iran, employees can defer tax payments for the next three months and the 3 million poorest Iranians will receive an additional cash subsidy. There will be additional tax relief for small to medium-sized enterprises.
Israel
Israel has delayed VAT payments for 10 days, from the scheduled March 16 date to March 26.
Turkey
Turkey will give a six-month deferral on some tax and insurance premium payments to certain sectors, including retail and transportation. The VAT on domestic air travel will be cut from 18 percent to 1 percent. Minimum payouts for pensioners will be increased and the government will make an early annual bonus payment to pensioners.
America
Canada
Canada’s federal government is deferring tax payments for individuals and businesses. Any income tax amounts owed on or after March 18 and before September 2020 can be deferred until after August 31, 2020. In addition, post-assessment sales tax or income tax audits for small and medium businesses will be suspended for the next four weeks. The finance ministry will also provide a temporary wage subsidy to eligible small businesses worth 10 % of remuneration over 3 months.
U.S.A.
TheUnited States of America has adopted a short-term expansion of paid sick leave. Tax payments have also been delayed until July 15 without interest or penalties. Total fiscal relief under negotiation could exceed $1 trillion.
Chile
The government has introduced a program that defers tax payments for businesses with annual sales of less than $12 million.
Mexico
Mexico has delayed deadlines for lawsuits in tax courts until April 19.
Europe
Italy
In Italy, tax deadlines have been extended for residents and companies in the so-called “red areas” of Italy. Also, all tax payments due in the period between February 23 and April 30 were extended until May 31, and tax credits will be granted to companies that suffer a 25 % drop in revenues. In addition, businesses receive a 50 % tax credit for sanitation expenses, such as daily cleaning services, masks, and other precautions that help stop the spread of new coronavirus. Italy’s Economy Minister, Roberto Gualtieri, announced that the government will adopt measures costing EUR 3.6 Billion (USD 4 Billion) to help the economy. Banks have been given options to take some loss deductions and convert them to tax credits.
Spain
The government has approved a tax relief for small and medium businesses and self-employed persons. Those businesses will be able to defer their tax obligations for six months without interest. The taxes included in this measure are income tax, corporate , and VAT.
France
The government is allowing companies to suspend payments of some social charges and taxes and is activating state-subsidized short-time work schemes.
United Kingdom
The U.K. government will waive business property taxes for retail, leisure, and tourism for 12 months to reduce the economic impact of the coronavirus. It also paused its plans to expand rules on the employment status of contractors in the private sector. These so-called “off-payroll” rules aim to ensure that contract workers pay about the same tax and social security contributions as regular private sector employees. The United Kingdom is also expanding the Universal Credit and working tax credit by £1,000 and delaying £30 billion in VAT payments. The U.K. government is maintaining its commitment to introduce a digital services tax by March end.
Germany
Germany will make it easier for companies to claim subsidies to support workers on reduced schedules to counter the effects of the pandemic. This is the same measure which was used to help prevent large-scale layoffs during the 2008 financial crisis.
Tax relief measures include broad deferral options and tax base reduction for trade taxes. Tax deferrals will be granted without interest, but taxpayers must apply before December 31, 2020. Late payment penalties are waived through the end of 2020. Advance payments for income tax and corporate tax are delayed until June 10. Trade tax advance payments are delayed until May 15.
The government has also discussed implementing a reform to the solidarity tax (a 5.5 percent surcharge on high-income earners) in 2020 rather than in 2021 as previously planned.
Germany is also providing up to €50 billion in support for self-employed and small and medium-sized businesses, and up to €500 billion in liquidity measures for affected businesses.
Denmark
Denmark announced three tax measures to boost business liquidity. Large companies will have 30 additional days to pay VAT, while all companies will be granted four additional months to pay their labor contributions. The government is also lifting the ceiling on businesses’ tax accounts so that corporations won’t have to pay negative interest rates when placing cash in the bank. That limit is rising from the current level of DKK 200,000 to DKK 10 Million until the end of November 2020.
Workers who are sent home will receive 90 % wage support for three months. The government is also covering sick leave costs from the first day of leave.
Greece
Greece will suspend VAT payments due at the end of March for four months and companies’ social security contributions will be suspended until June 30. VAT reduction to 6 % from 24 % for products related to preventing spread of coronavirus.
Austria
Austria is reducing income and corporate tax prepayments, deferring tax payments, allowing taxes to be paid in installments, reducing or providing relief from late tax payments, and suspending tax audits. For businesses that need to reduce working hours, labor subsidies are being provided. There is also direct aid being provided to sole proprietorships and family-owned businesses in addition to the tourism and cultural sectors.
For corporate tax payments, taxpayers can apply to have their advance payments reduced to zero or to receive a payment deferral or an installment plan. Applications can be submitted until October 31, 2020.
Value-added tax (VAT) payments can also be deferred on a case-by-case basis, and payments are not necessary while an application for deferral is pending with the tax authorities. The VAT payment due on June 30, 2020, is expected to be delayed.
Estonia
Estonia has suspended interest penalties on late corporate tax payments for two months.
Finland
The country is delaying corporate income tax payments.
Ukraine
Ukraine will exempt imported medicine and medical devices and equipment needed to prevent the spread of coronavirus from its VAT.
Norway
Norway has reduced the employee tax rate by 4 points for 2 months. Corporations will be allowed to deduct losses in 2020 to reduce tax payments in the two previous years. The reduced VAT rate (12 percent rate) will be temporarily lowered to 8 percent, and this change is retroactive to January 1. Tax payments for VAT and advanced tax payments for other businesses will be postponed. Net wealth tax payments will be reduced for those who own stock in loss-making companies. The tax on air passenger flights is suspended from January 1 to October 31, 2020.
Luxembourg
Luxembourg is allowing businesses to file requests for cancellation of the first two quarterly tax payments for 2020 (for corporate income and municipal business taxes), and there is a four-month deadline extension (for corporate income, municipal business, and corporate net wealth taxes) for all payments due after February 29, 2020.
Sweden
Sweden is allowing businesses to reclaim tax payments that were made from January to March.
Romania
Romania will suspend most tax audits, extend the deadline for an annual profits tax from March 25 to April 25, and speed up VAT refunds to help businesses.
Slovakia
In Slovakia, companies and individuals will receive an automatic deadline extension of up to three months.
Portugal
Portugal has suspended social security contribution payments for companies affected by the coronavirus outbreak. VAT and withholding tax payment schedules can be adjusted for businesses with less than €10 million in revenues in 2018 or a 20 percent reduction in revenues.
Poland
Poland has extended the deadline for the new SAF-T VAT regime from April 1 to July 1. The government is also allowing accelerated VAT refunds. The personal income tax deadline is extended by one month, and businesses can apply to defer social security contributions for three months. In addition to these changes, there is a roughly PLN 212 billion relief package aimed at supporting the economy and the health-care system.
Netherlands
The Netherlands has created a blanket three-month delay for payroll, income, and corporate tax payments along with VAT. Late payments will face a reduced interest cost of 0.01 percent. The government is also providing support for businesses that see a 20 percent reduction in revenues, at 90 percent of wage costs. There is also a €4,000 compensation payment available to businesses that were forced to close temporarily, and an expansion of government guarantees for loans to small and medium-sized businesses.
Lithuania
Lithuania has delayed the corporate tax and filing deadline until March 30. Businesses can revise their corporate income tax calculations based on projections for 2020 rather than the previous year’s results. Personal taxes have also been delayed from May 4 to July 1.
Latvia
Latvia has extended the VAT reclaim deadline for non-EU countries, from June 30 to the end of September.
Ireland
Ireland has instituted a broad relief program amounting to €3 billion. Relief includes waiving interest on late tax payments and a suspension of the relevant contracts tax. Broad lending authority and specific relief for temporary layoffs is also included. Employers who temporarily lay off their employees due to the crisis will be eligible to get a refund from the tax authority for €203 per week for payments to those laid off workers.
Iceland
Iceland is postponing payment deadlines for social security taxes and public levies. Taxes that were originally due on March 16 are delayed until April 15. No penalty or surcharge will apply if the payments are made by April 15.
Hungary
Hungary is providing relief for social security contributions. Employers will not be required to pay the employer side of social security contributions (17.5 percent + 1 percent) from March through June. Employees will only be liable for their 4 percent health-care contribution rather than the total 18.5 percent social security contribution.
Czech Republic
The Czech Republic is waiving penalties and default interest for income tax payments. Late filing waivers for all taxes will be case-by-case. There is also a general waiver of penalties with respect to VAT statements.
Applications will also be considered for businesses that wish to cancel income tax prepayments, defer tax payments (for VAT or income tax), or extend their filing deadline for corporate income tax returns.
Bulgaria
Bulgaria has extended deadlines for business taxes from March 31 to June 30. Personal income tax returns will get an extension from April 30 to June 30.
Belgium
Belgium has adopted several measures to delay tax payments. Corporate and income tax payments deadlines are extended for an additional two months. There is also relief for late payments for tax liabilities prior to March 12. For businesses that demonstrate that payment difficulties are linked to the coronavirus outbreak, the government is providing a VAT payment plan that gives relief from penalties. A similar payment plan is available for payroll tax liabilities.
VAT filings have been delayed by two weeks and payments have been delayed by two months.
Oceania
Australia
Australia has announced federal relief proposals that total around $189 Billion (AUD). State governments have also announced relief packages and in some cases deferrals of payroll tax payments (Australian Capital Territory, Queensland, Victoria, Western Australia).
The federal relief package includes direct payments to citizens. For job seekers impacted by the downturn, there will be payments of AUD 550 every two weeks in addition to current income support payments. The government expects these payments to cost AUD 14.1 Billion. There is also a broad-based, AUD 750 one-time payment to eligible recipients—this is expected to cost $4 billion. Individuals will also be able to temporarily access up to AUD 10,000 from certain retirement accounts.
The aid packages provide relief to businesses through subsidized loans and central bank lending, and temporary relief from insolvency laws, immediate expensing (instant asset write-off), and accelerated depreciation.
Immediate expensing will now be available for assets costing less than AUD 150,000 on a per-asset class basis. Eligibility is expanded to include businesses with annual revenues of less than $500 million (the current cap is AUD 50 million). This measure applies until the end of June.
Accelerated depreciation will be provided temporarily for businesses with less than AUD 500 Million in revenues. In addition to current depreciation deductions, the policy allows an additional 50 percent deduction but only applies to assets purchased after March 12 and put into service by June 30, 2021.
Businesses subject to the Goods and Services Tax (GST) can apply for deferred payments if they are facing cash-flow challenges. Also, businesses that receive credits or refunds under the GST can switch from quarterly to monthly filings to speed up their refunds.
New Zealand
New Zealand has announced the reintroduction of depreciation deductions for commercial and industrial buildings to encourage investment. In addition, the threshold for payment of provisional tax will be increased to NZ$5,000 (US$ 2,850) to reduce cash-flow pressure on small firms.
While the Calendar New Year is the perfect time to form your New Year Resolution. The Financial New Year also allows us to make our Resolutions. And no, it’s not about reading books or joining a gym. It’s about staying ahead of the curve and managing your Finances in a proactive way. It’s time for you to form your New Financial Year Resolution.
What are the Financial Resolutions?
While there are lots of fun Resolutions for a Calendar New Year, Financial New Year Resolutions will be far more impact-full and worthwhile. The beginning of a Financial Year allows Individuals to ask this very important question, “What do I do with my money?“.
Form a Budget that you’ll stick to
How many times have you planned something and it hasn’t gone as per your plan? More times than you might remember, right? Forming a realistic Budget is very important as “A Budget tells your money where to go, Instead of wondering where it went“. The benefits if one follows a Budget will always outweigh someone who didn’t.
A Budget is detrimental when it comes to pre-planning your finances. You should form a Budget as per your financial goals. Because a Budget helps to segregate your money, have a contingency fund for emergencies, keeps a check on bad spending habits and helps to focus on the bigger picture.
We get it! Sticking to a Budget is hard, often challenging. But, Let’s not forget the profound satisfaction that you’ll feel when you follow your Budget.
Understanding your Tax Liability- Budget 2020
Budget 2020 mandated several changes in Chapter VI A Deductions, abolishing the Dividend Distribution Tax (DDT), Applicability of Tax Audit and Change in the criteria for Residential Status.
However, the biggest change is the introduction of an Optional New Tax Regime. The Taxability under this regime changes completely. Hence it is advisable for individuals to understand the different changes.
P.S. In case you missed the Budget 2020. Worry not, we got you covered- Budget 2020 : Highlights.
For an Individual, deciding which Tax Regime to follow is very important. You should take this decision after calculations and not speculations. For a common man, calculating his taxable income can be a tricky affair. Hence, we build a Tax Calculator Tool that can help ease the burden.
Re-balance your Portfolio
Ending of the Financial Year brings an opportunity to re-balance your trading portfolio. Re-balancing Portfolio is essentially buying and selling of stocks until the desired level of asset allocation is reached.
Traders can also reduce their taxability by setting off their realized losses against realized profits. This method is called Tax-loss harvesting.
Re-balancing your portfolios also mean shedding off underperforming assets and re-evaluating your risk appetite.
Pursue your growth plans
A new Financial Year brings an opportunity to rethink, ‘What are my Business Goals?’. It could be expanding to a new geographic, or extending the product line, deciding a growth plan for your business and acting upon it is very important.
This time of the year allows business owners to sit back and contemplate on their businesses. If your company is outperforming, maybe its time to expand into different geographies, or in case it isn’t performing as desired, it may be the right time to cut the dead weight.
Raise Funds
For a startup, funds are like the ‘Apple of Eden‘. Hence, as a Startup, deciding whether you need an Investor or not is extremely detrimental. Having decided, finding the correct investor, planning the funding and allocating these funds in a way that brings the best output needs to be done.
Startups can utilize these funds to hire new talent, do more research, focus on product building or branding.
Note- It is not necessary for all startups to have an investor. The decision depends on the nature of the business and the ultimate goal of the business.
Start Saving
You might have read “Never Spend your Money before you have earned it“. As good as these quotes sound, it forgot to mention a very important step, i.e Save before you spend.
As a general rule of thumb, it is advisable to save at least 10% of your income each month. A major misconception that people have is treating Savings and Retirement fund just the same. Those two are poles apart, but we’ll get back to Retirement Fund later.
A Major benefit of savings is ‘Money working for you‘. Picture this: You save 10% of your monthly salary and put it in a Savings Account. Not only your principal amount will grow with monthly Deposits, in time you’ll receive interest on it as well.
Another perk of savings is that you can claim Tax Deductions on them as well. Saving under Chapter VIA, an Individual can claim up to INR 1.5 lakh worth of Tax Deductions annually.
Becoming Debt free
Nowadays, Debt has become very common for Individuals and Businesses. We understand, sometimes businesses/individuals might seek capital in the form of debt, and it might be the right thing at that time. But it doesn’t mean that businesses/individuals should allow debt to pile up.
Debt should be taken for appreciating assets like real estate. However, bad debts make you less agile, limit your growth opportunities and bring a lot of stress. Since, books of accounts start afresh with ta new Financial Year, it marks a perfect opportunity to plan out the ‘repayment of the debt’.
Not only it will increase your credit score but it will also increase your financial security.
Buy Insurance
Even though crores of individuals in India have an insurance, there is still a large section of the society which doesn’t. The idea of Insurance has exploded in the past decade and it has become very mainstream. Insurance is a way to ensure that in an unwanted scenario of loss, your interests are covered and damages are mitigated.
Insurance can secure your home, vehicle, cover medical expenses for you and your family. You can also avail Tax benefits of INR 1.5 Lakh under Chapter VI A while buying Insurance.
Start Investing
“Don’t work for money; make it work for you“. And the logical way to do that is via smart investments. In this day and age, investment options are plentiful. And so it has become increasingly easy to loose track of our Financial Goals. We can’t emphasize enough on the importance of investing.
If planned properly, you could build wealth, save on taxes, have a retirement fund and always stay ahead of inflation. The idea of investing might seem far fetched for the youth. But make no mistakes, investing from a young age will build the foundation of your life.
However, it goes without saying that investments can be a tricky subject. Many newbies can loose incredible amount of wealth if not planned correctly.
So there you have it. Our 9 New Financial Year resolution. Following these resolutions will undoubtedly bring order in your finances. Which will allow you to lead a happier and hassle-free life.
