Financial Cocktail Samosas: Bitesized Money Morsels For You, 07/06/2023

Common Mistakes to Avoid While Filing ITR

IT return filing can be overwhelming for an average taxpayer. Not surprisingly, mistakes are committed while filing the ITR. Discussed below are some common mistakes that you should avoid during IT return filing.

🟢 Incorrect ITR Form – There are seven ITR forms based on the type of income and taxpayer. If you choose the incorrect form, your return might not be processed.

🟢 Incorrect personal information – Personal details in ITR include name, address, email, phone number, date of birth, PAN, etc. Incorrect addresses, email and phone numbers can lead to missed communications between the IT department and the taxpayer.

🟢 Delaying tax payments – Irrespective of the fact that you can do your IT return filing by 31st July, the last date of tax payment remains 31st March. Therefore, always calculate your tax liability and pay advance tax by this due date. Not doing so attracts an interest of 1% per month on the unpaid tax liability.

🟢 Not reporting all income – You are salaried but may have earned dividend income, have professional income and may also have some capital gains during the year. Disclose all income earned during the year. PAN is linked to all incomes; so, any unreported income will show up on the return’s assessment and may lead to scrutiny.

🟢 Failure to e-verify – IT return filing may seem complete when you submit the return. However, to ensure that the process is fully completed, remember to e-verify the return. Also, remember that IT Dept has reduced the ITR verification time from earlier 120 days to only 30 days now. If you do not Verify your ITR within 30 days of filing it, you may have to re-file your ITR and also pay any penalties for filing the ITR late.

We are also providing ITR filing services to our clients. For any queries related to ITR filing, we request you to go through the link mentioned below.

(Contributed by Abhilash S Rana, Financial Planner, Team HNI, Hum Fauji Initiatives)

Money is an Asset but Can Be Evil too

Nowadays everyone perceives money as a powerful tool that has the potential to bring prosperity and fulfil one’s dreams. However, like any tool, its impact depends on how it is used.

How you deal with money at different stages of your life decides the impact the money is going to have on your life.

Childhood: Laying the Foundation
It is a critical time for shaping our financial habits. During these formative years, we learn about the value of money and how to manage it responsibly. As parents or guardians, we have the opportunity to instil valuable lessons in our children. Teaching them the importance of saving, budgeting, and delaying gratification can help foster a healthy relationship with money. Encouraging them to set financial goals, such as saving for a desired toy, can lay the foundation for a lifetime of financial responsibility.

Youth: The Time of Opportunities
It is a period filled with aspirations, dreams, and countless opportunities. It’s essential to strike a balance between enjoying the present and planning for the future. This involves managing debt responsibly, building an emergency fund, and creating a budget. By prioritizing saving and investing early on, we can harness the power of compounding interest, which can significantly impact wealth accumulation over time. Being mindful of lifestyle inflation and seeking guidance from financial advisors can help us make informed decisions about our financial future. Investing in self-improvement, such as education or acquiring new skills, can lead to better career opportunities and financial stability.

Old Age: Financial Security and Legacy
In old age, financial security becomes paramount. Planning for retirement, managing medical costs, and creating a Will or estate plan are essential steps. Diversifying investments and exploring options such as pension or long-term care insurance can provide a safety net. Additionally, considering philanthropy and leaving a legacy can bring immense fulfilment and make a positive impact on future generations.

Money is undoubtedly an asset that can bring immense opportunities, but if not managed properly, it can lead to detrimental consequences.

(Contributed by Gautam Arora, Associate Financial Planner, Team Sukhoi, Hum Fauji Initiatives)

The Power of Patience: Transferring Wealth From the Hasty to the Patient Through Smart Investing 

In the world of investing, it’s easy to get caught up in the hype of quick gains and rapid trades. But the truth is, patience is a great virtue when it comes to investing. Patient investors are more likely to make sound decisions that will lead to long-term success.

The Virtues of Patience: Patient investors don’t rush into investments. They do their research, understand market cycles, and choose investments that align with their long-term goals. They don’t react to short-term volatility, knowing that true wealth creation takes time.

Smart Investing Strategies: In addition to patience, many smart investing strategies can help you maximize your returns. These include diversification, long-term investing, and regular portfolio reviews.

The Wealth Transfer: The power of patience is evident in the wealth transfer that takes place between patients and impatient investors. Impatient investors, driven by short-term gains, often panic during market downturns and sell their investments at low prices. Patient investors, on the other hand, stay calm and buy these discounted investments, which can lead to substantial wealth accumulation over time.

Patience is an important virtue for investors. It can help you make sound decisions, avoid market volatility, and maximize your returns. If you’re patient, you’ll be well on your way to long-term financial success.

(Contributed by Ankit Kumar Singh, Associate Financial Planner, Team Sukhoi, Hum Fauji Initiatives)

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