With Arun Jaitley’s Budget 2016 looming, here are 5 tips on how to manage your income tax dues, money

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Published: February 22, 2016 2:05:48 PM

With FM Arun Jaitley all set to present the Union Budget 2016-17 on February 29, 2016, expectations are that he will change the threshold limit and perhaps more. But if the change comes, will you be able to take advantage of that?

companies revenueAt the end of the year, accounting for your income and filing returns is inevitable. So why not have a plan for it?

Budget 2016: With FM Arun Jaitley all set to present the Union Budget 2016-17 on February 29, 2016, expectations are that he will change the threshold limit and perhaps more. But if the change comes, will you be able to take advantage of that? Getting benefits requires some homework on your part. Once you are familiar with the basics, you will be able to take advantage of changes and put extra money in your pockets. The most important thing to start with is deciding on your financial goals. Following this will be the action plan. Accordingly a strategy can be chalked out. Good money management doesn’t just happen! It is a result of diligent thinking, prioritizing and planning. And it pays to start early.  So, here are 5 tips on how to manage your own money:

1. Budget 2016: No one escapes taxes!
You got to pay taxes! But planning for taxes is generally ignored. At the end of the year, accounting for your income and filing returns is inevitable. So why not have a plan for it? Read up about tax saving and investing. Investing in tax saving tools right from the time you start earning is a wise thing to do. One can claim deductions and save by investing in PPF, EPF, ELSS and many other listed under section 80C.

2. Budget 2016: Know you cash flow!
How difficult is it to keep a track of money coming in and money flowing out? Sounds simple right! But this is where majority of adults falter almost all the way to midlife or even retirement. By simple tracking cash flows, one can stay out of financial trouble. Sinking in a debt pit would be impossible. Do your finances a favor by monitoring your cash flows as much as possible. The monthly expenses have to necessarily be within limits of monthly income. If credit cards are required in addition to the income to pay for your expenses then stop and analyze the situation. This is the beginning of trouble.

3. Budget 2016: Set up goals!
Because a ship without a destination is going to reach nowhere! While the first paycheck brings along with it an enormous sense of achievement, one must bear in mind that this is only the beginning. Securing a job is not a goal, it is the means to achieve your goals. Chalk up your financial and personal goals. Set up dates for getting there and start the work. Investments need to be made accordingly in such a way that returns help you achieve your goals within the decided timeframe.

4. Budget 2016: It’s never too early to think of retirement!
Gone are the days when people stuck on to their jobs for decades and retired at 60. We live in a dynamic world, so full of possibilities! There has never been a better time in history when it was so easy to turn doing what you love into your job. So basically planning for retirement means planning for a time when you would have enough money to stop working for a monthly paycheck and start doing something you love while feeling financially secured. For some people this time would be earlier than for others. But it is important to start working towards a goal like this. Set aside funds every month and invest in safe long term investment options with good returns like the PPF.

5. Budget 2016: Educate yourself!
No financial planner can understand your goals better than you do! Advisors, financial planners, etc are only responsible for presenting various options to you. The decision to walk down those roads is entirely yours. So invest time and money in educating yourself to handle your own finances. Understand the taxes paid, analyze risk and return potential of various investments and make optimum utilization of credit. It’s all about knowing what works best for you and monitoring it regularly.  Working on these few points is enough to give you a head start in managing your own money. So, when, and if, FM Arun Jaitley gives the common taxpayer a few breaks in Budget 2016, you will be ideally placed to take advantage of it from the word go.

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