The best time to start financial planning is April 1. You can start on a clean slate at the beginning of the new financial year, as it is an ideal time to finalize your plans for saving , investing, spending and so on.

By on 13-11-2018

START FINANCIAL PLANNING FROM DAY ONE OF THE FINANCIAL YEAR

The best time to start financial planning is April 1. You can start on a clean slate at the beginning of the new financial year, as it is an ideal time to finalize your plans for saving , investing, spending and so on.

"There is no better time than April to start the planning process as you have just gone through the exercise of collating your finances for your taxes.

 STARTING BLOCK:

According to experts, most people need to begin at the beginning. That is: starting the process to get their financial records in order so that they know about their assets and liabilities . This process will help one figure out how much money s/he has to save, invest, and spend. It may also tell you that you have to first focus on getting rid of some liabilities before dreaming about great investments.
"Around this time, salaried employees receive annual bonuses and the tendency is to splurge on vacations or consumer goods. Instead, they should try to repay their liabilities. If not the entire debt, they should look at repaying at least a part of it.

 THINK OF TAX FIRST:

 You may remember the cliche about taxes — you can't escape death and tax. That is why it is always a good idea to start with tax planning.
Tax planning is a way by which you arrange your financial affairs in such a way that without breaking up any law you take full advantage of all Exemptions, Deductions, Rebate and Reliefs allowed by law so that your tax liability will be reduced.
Actually Government provide deductions, exemptions, reliefs or rebate for the benefits of economy and society. Like if you made donation to Scientific research [u/s 8GGA] then it’s good for Society and economy too.

 OBJECTIVE OF TAX PLANNING:

• Claim Deductions under sections 80C to 80U,
• It will reduce your tax liability and you have to pay less tax,
• Minimize the war between Tax Payer and Tax Administrator, Tax payer wants to pay less tax and Tax Administrator wants to extract most of the tax, by using Tax Planning this war is minimized as tax payer is using all legal ways to reduce tax liability,
• Makes Investment :- By tax planning, an Tax payer will invest his money in some good funds which will result in productive returns for tax payer and transfer money to government for investment too.
• Helps in growth of economy,
• Makes society grow,
• Money saved by you will result in investment which will result in employment generation.

IMPORTANCE OF FINANCIAL PLANNING:

Another thing you have to remember is that saving or investing regularly to meet your tax-planning goals also yield you better returns from these avenues. Financial Planning is process of framing objectives, policies, procedures, programmes and budgets regarding the financial activities of a concern. This ensures effective and adequate financial and investment policies. The importance can be outlined as-

• Adequate funds have to be ensured.
• Financial Planning helps in ensuring a reasonable balance between outflow and inflow of funds so that stability is maintained.
• Financial Planning ensures that the suppliers of funds are easily investing in companies which exercise financial planning.
• Financial Planning helps in making growth and expansion programmes which helps in long-run survival of the company.
• Financial Planning reduces uncertainties with regards to changing market trends which can be faced easily through enough funds.
• Financial Planning helps in reducing the uncertainties which can be a hindrance to growth of the company. This helps in ensuring stability and profitability in concern.