⏰Last-Minute Tax-Saving Toolkit
Hey-lo!
Tick, tock, tick, tock... Hear that? That’s the sound of the financial year winding down and perhaps, your anxiety going up! Now let’s see,
If you’re type 1 or 2, we still have some SOS tips to stop you from making bad decisions. If you’re type 3 or 4, don't panic – we've got your ultimate guide to those eleventh-hour tax fixes that'll save you from any last-minute woes. Get ready to bid farewell to your tax season stress and hello to that extra cash in your bank account!😉✨
Now here’s what’s in store for you:
Market performance & the Indian economy
Uday’s tip on what NOT to do this tax season
✨ Last-Minute Tax Planning Tips✨
Read of the month
Everything that’s worth 4 mins of your time!
‘Sup with the market
📈 February has been quite a ride in D-Street! Our domestic indices soared for the third week in a row, hitting fresh highs fueled by a faster-than-expected growth spurt in our economy during the December quarter of FY24. 🚀 On the global front, however, markets in the US, Europe, and Asia have been swinging back and forth, responding to fluctuating global cues. 🎢
But hey, here's the good news: India's economy flexed its muscles, showing a robust 8.4% growth in Q3 of FY24, with even Q1 and Q2 data getting a pleasant upward revision. 📊 And as the icing on a cake the U.S. personal consumption expenditure price index took a breather in Jan 2024, marking its slowest growth in nearly three years! 🛑
Fingers crossed for a smoother March and an even better rest of the year ahead! 🤞📅
📌 What NOT To Do This Tax Season ft.
Udayan is yet another amazing creator-friend we discovered, thanks to Instagram and Mark bhaiya! He’s a powerhouse of value-adding content and he’s out there simplifying investments & insurance, check him out @udayanonmoney. Over to him:
With the tax season around the corner, many of you may be advised to invest in ULIPs or Unit Linked Insurance Plans, as a measure to save tax, and I think it’s the worst idea, here’s why:
❓What are ULIPs? ULIPs often touted as a dual-purpose investment vehicle offering investment and life insurance benefits. That sounds great. However, the reality is far from ideal as it doesn’t do either job well. When you invest in a ULIP, roughly 90% of your money gets invested. The rest goes towards fund management fees, mortality charges, and agent commissions among many other items. This means that from the get-go, you're starting with a negative return on your investment, making it extremely challenging for ULIPs to perform well compared to other investment options like mutual funds.
🚫 High Fees and Low Returns: One of the key reasons ULIPs underperform is their high fees structure. Unlike mutual funds, which typically have lower fees, ULIPs come with hefty charges that eat into your returns. Additionally, the life insurance cover provided by ULIPs is often disproportionate to the premiums paid, offering minimal coverage compared to standalone life insurance policies. This combination of high fees and inadequate coverage makes ULIPs a poor choice for investors seeking optimal returns and insurance protection.
🔍 Spotting the Wolf in Sheep's Clothing: It's essential to recognize ULIPs when they're presented to you, especially since they're often marketed under various names and disguises. Remember that ULIPs are offered by life insurance companies, not asset management firms like mutual funds. So, in case anyone asks you to invest in ULIPs, just ask them for the scheme information document and check if its offered by a life insurance company or a mutual fund house.
As a thumb rule, remember that any life insurance policy that gives money while you’re still alive tends to be higher in cost than what you need, and in almost every situation, it needs to be avoided.
💡 Consider Alternative Investment Options: Instead of opting for ULIPs, consider alternative investment options like ELSS (Equity Linked Savings Scheme) mutual funds or PPF (Public Provident Fund) for tax-saving purposes. These alternatives often have lower fees and offer better potential returns, providing a more effective way to save taxes while also growing your wealth.
⏰ 3 Last-Minute Tax-Saving Tips
Feeling the heat as the tax deadline looms closer? Don't sweat it – we've got your back with three emergency tax-saving hacks to pull you out of the fire. Whether you're a procrastinator or a planner, these tips can help you salvage some serious savings.
🚨 SOS: Save (Y)Our Savings! - First up, let's tackle those investments. Haven't maxed out your Section 80C deductions yet? No worries! Consider making a last-minute investment in eligible avenues like ELSS (Equity Linked Savings Scheme), PPF (Public Provident Fund), or NSC (National Savings Certificate) to slash your tax bill and beef up your savings simultaneously. Every rupee saved counts!
🏠 Make Your Rent Work for You! - Next on our tax-saving agenda: HRA (House Rent Allowance) exemptions. If you're a rent-paying individual, ensure you've submitted your rent receipts to your employer and claimed HRA deductions to the fullest extent allowed by law.
💪 Invest in Health Insurance! - Last but not least, let's talk health insurance. Haven't secured a health insurance policy yet? Now's the time! It provides financial protection against medical expenses, it offers tax benefits under 80D, what’s not to love? So, grab a health insurance policy before the financial year wraps up!
🔖 Best Read Of The Month
I was reading "The Hard Thing About Hard Things" and in short, it is like a GPS for navigating entrepreneurship. Ben Horowitz's candid insights feel like a mentor whispering in your ear, reminding you that failure is just a pitstop on the road to success. It's a must-read for anyone brave enough to embark on the wild journey of building their own business!
🍸 Cocktail Pe Charcha
Is it too overwhelming to research & plan your investment? Say no more, we can personally guide you into mixing the perfect financial cocktail to manage your money!
I know most of you are mentally in Jamnager and can prolly not pay attention to anything else, but phew! Can you believe we've reached the end of another tax season already? Before you breathe that sigh of relief, take a moment to pat yourself on the back🤝 We hope this monthly newsletter, albeit a little late than usual, could help you with your tax-planning in the littlest of ways.
Cheers to slaying taxes like a boss!✨💸
Sayali ❤️