Managing your budget and financial responsibilities is a major challenge for every office goer. The complexity of the challenge of financial planning compounds to a whole new level in the months of January and February. Because, with the end of financial year near, working professionals have to start planning their income tax savings and start filing their returns and many other things.
With the new financial budget on the cards on the 1st February, it is time for you to take a look back at all the financial policies and governmental regulations that were passed in 2017. This will help you to understand your financial liabilities and also aid in finding the right solutions for them.
So, let’s take a deep insight on Income tax, interest rates on saving accounts, budget, GST, Aadhar, their impact on your financial life and key takeaways for 2018:
The budget released by Government of India in 2017, reduced the tax rate for individuals earning in the slab of Rs. 2.5 lakh to Rs. 5 lakh by -5%, which was 10% earlier. In addition, the rebate under Section 87A of the Income Tax Act was slashed to Rs. 2,500 from Rs. 5,000. This is applicable for those whose earnings fall in the slab of Rs. 2.5 lakh to Rs. 3.5 lakh.
Lesson for 2018: Be cautious while filling your Income Tax for the financial year 2017-18 in 2018 by calculating your taxes using the updated tax structure and rebate changes.
The massive impact of demonetization has influenced bulk money deposit in banks. It was recently reported that 85% of the liquid money in circulation was deposited back in banks. This led to increase in the availability of funds in the banking infrastructure of the country. Owing to the increased liquidity in the banking system, many private and public banks have reduced the interest rate on saving accounts by a percent or so. Specifically, State Bank of India has cited the high real interest rates and decline in inflation as the major reasons for reducing the interest rates on saving accounts. Although, there are a few banks coming up with higher interest rates but have their own policies.
Lesson for 2018: Start investing your money in mutual funds, insurance, stocks and fixed deposits to get higher returns in future. Keeping your money idle in saving accounts will take your wealth nowhere.
The much talked about - Aadhaar by now has become the topic of national importance. Recently, the Supreme Court has accepted the government’s suggestion to postpone the deadline of linking Aadhaar with bank accounts, mobile phones and saving accounts. Now, the last date to link Aadhaar with various financial services account is 31st March, 2018.
Lesson for 2018: It’s yet to be decided if Aadhaar, in anyway, infringes upon the privacy of individuals or not. However, it seems to be clear that, one may face a few more hiccups if Aadhaar is not linked with his/her financial accounts by 31st March, 2018. Therefore, it will be wise to link Aadhaar with your bank accounts, PAN and other financial services to keep your personal finance process smooth in the year 2018.
Hope this article would have served your purpose to become a better financial planner this year. In case, you have something to say or you want to share your opinions, please don’t hesitate to write down your thoughts in the comment box below. Also, you can share this article to let your friends know about the personal financial tips to follow in 2018. For more interesting articles related to personal finance and financial planning for working professionals, do visit www.jagranjosh.com/jobs.