The end of the year is approaching fast and as we move into a new year it is important to ensure that you are in the right place, financially.
Check the current allocation of your portfolio against your desired asset mix. If equity markets have surged or dipped, rebalance your portfolio to maintain your preferred risk level
The end of the year is approaching fast and as we move into a new year it is important to ensure that you are in the right place, financially.
Review Your Tax Planning
Even though the financial year ends in March, take stock of your tax-saving investments now to avoid a late-minute rush. Begin or continue investments in tax-saving instruments like ELSS or PPF if you haven’t reached your limits under Section 80C and other applicable deductions. Proactive tax planning today keeps last-minute stress away. This, of course, applies to you if you are still sticking to the old tax regime.
However, remember that capital gains taxes apply to both regimes. “Lastly, remember to pay any required advance taxes if you have capital gains. Failing to do so could result in significant penalties and interest. Be sure to assess your capital gains and pay the appropriate advance taxes. Also, remember that you may need to adjust your advance tax payments to account for any capital losses you may have incurred. This is important to avoid potential penalties and ensure accurate tax payments,” says Anand K. Rathi, co-founder, MIRA Money.
Review The Goals You Set At The Beginning Of The Year
Also, use this time to refine next year’s goals, incorporating learnings from this year. A goal without review is like a ship without a compass.
Rebalance Your Investment Portfolio
Check the current allocation of your portfolio against your desired asset mix. If equity markets have surged or dipped, rebalance your portfolio to maintain your preferred risk level. “Harvest profits in overperforming areas and reinvest in lagging but promising sectors or instruments. Portfolio balance is the secret to staying calm in market storms,” says Col Sanjeev Govila (retd), certified financial planner, CEO, Hum Fauji Initiatives, a financial advisory firm.
Review Your Health And Life Insurance Coverage
Review your health and life insurance coverage to ensure they are adequate for your current needs. Upgrade or top up policies before premiums rise in the new year. Insurance is the gift of peace of mind—ensure you’re adequately covered.
Review How Your Spending Matched Your Planned Budget This Year
“Did you save as much as you intended? Adjust spending habits for the new year if needed. Redirect unused allocations into emergency funds or investments. A year-end expense audit is a mirror that reflects your financial discipline,” says Govilla. In case you have overshot your budget, you must stem the tide by putting checks and balances in place.
Update Financial Records And Documents
Check nominee details in your bank accounts, insurance policies, and investment accounts to ensure they are up-to-date. Ensure your PAN, Aadhaar, and KYC are linked and compliant across financial instruments. Keeping records updated is the foundation of a smooth financial journey.