5 Point Checklist For Your Fiscal Year End Review

You may have bid goodbye to one calendar year a month ago. But the fiscal year - or the financial year - is a whole other story. As this financial year inches closer to completion on March 31, 2022, you have a little over a month to tie up any loose ends and give your personal finances a facelift if you need to.

If you're not sure what you absolutely need to take care of before the end of this fiscal year, a quick checklist can always be a great place to get started at. So, here is a closer look at 5 important things that you need to do before FY 2021-22 comes to a close.

Your income tax is calculated on the basis of the income you earn each financial year. This also means that in order to be eligible for the tax benefits on certain investments and expenses, they need to be made during the financial year concerned. So, take a while to quickly run through the tax benefits you are eligible for this year, and see if you have maximized and optimized your tax savings.

For instance, under section 80C of the Income Tax Act, 1961, you can claim up to section 80D of the Income Tax Act, you can claim up to Rs. 25,000 on the premiums paid for health insurance for yourself, your spouse or your child.
Go over these benefits, check what you are eligible for, and in case you need to make any investments to maximize your tax savings, ensure that you do them before the fiscal year ends.

You may have several investments in place. However, in the case of certain schemes, you need to make a minimum annual investment in order to keep your account active. Here is a closer look at some such relevant examples, so you can better understand the context.

• If you have a Public Provident Fund (PPF) account, you need a minimum contribution of Rs. 500 annually to keep it active.


• A minimum investment of 250 per year is needed to keep your Sukanya Samriddhi Yojana account active.


• In case you have been investing in the National Pension System (NPS), a minimum annual investment of Rs. 1,000 is necessary to keep the Tier I account active.

So, with the fiscal year coming to a close, now may be a good time to review these accounts if you have invested in these schemes. In case you have not made your minimum contribution this year, ensure that you set aside a part of next month’s budget to take care of this.

According to section 208 of the Income Tax Act, any individual whose estimated tax liability for the financial year exceeds Rs. 10,000 is liable to pay advance tax in installments over the course of the year. The due date for the last installment is March 15 of the concerned fiscal year.

In case you are a salaried employee, your employer may have already deducted TDS for you. However, in case you are self-employed, or if your employer has not made the necessary deductions, you will have to assess your liability and pay the advance tax due within the due date. Failing to do so means that you will have to pay interest under section 234B, leading to extra costs.

The government of India had already extended the due date for filing Income Tax Returns (ITRs) for FY 2020-21 to December 31, 2021. However, in case you have still not yet filed your Income Tax Returns for the financial year 2020-21, you can catch up by filing a belated return by the end of the relevant assessment year. And that would be March 31, 2022.

Keep in mind that if you are filing a belated return, you will also have to pay a penalty ranging from Rs. 5,000 to Rs. 10,000, depending on when you are filing your ITR. In case your total income is below Rs. 5 lakhs, your penalty is limited to Rs. 1,000.

Taxes and ITRs aside, you also need to perform your annual portfolio review before the end of the financial year. Check how your investment portfolio has performed. Assess the asset allocation and review if it is still aligned with your goals. In case of any massive changes, you may need to sell off some assets and reinvest the funds in other investment options.

This may also be the right time to let go of any loss-making capital assets if you wish to, so you can carry forward the capital loss and set it off against capital gains in the coming financial years.

So, before this fiscal year comes to a close, take some time off to look up how your investment portfolio has performed. You may also find that this is the right time to review your financial budget for the next year.

This essential checklist should help you take care of the financial tasks that you may have delayed due to various personal or professional reasons. So, if you need to tweak your budget a bit or make any major or minor investments before the financial year is up, you have a month and a week or two to take care of these important tasks. And after that, the next fiscal year is all set to come knocking.

As you've seen in the essential checklist above, you need to be aware of the amount of tax deduction and tax exemption that you are eligible for. Want to know the difference between these two concepts? In that case, all you need to do is check out our blog to get a better idea of these insights.

Read it here

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