Arthgyaan

Supporting everyone's personal finance journey

Maximizing Your Finances: Smart Moves for Your Tax Refund Windfall in India

Expert tips for maximizing your tax refund so that you can do the best thing to do for your portfolio in India.

Maximizing Your Finances: Smart Moves for Your Tax Refund Windfall in India


Posted on 13 Sep 2023
Author: Sayan Sircar
5 mins read
Get new post notifications on WhatsApp!

Expert tips for maximizing your tax refund so that you can do the best thing to do for your portfolio in India.

Maximizing Your Finances: Smart Moves for Your Tax Refund Windfall in India

📚 Topics covered:

What is an income tax refund?

An income tax refund is issued once you file your yearly income tax refund and you have somehow paid extra tax. The return that you have filed is scrutinised, approved and then either a demand is produced, if tax is due or a refund is issued if you have paid excess tax.

Related:
How to check your income tax refund status?

There are many reasons why a refund might be due. A few examples are:

  • Making mistakes while filing like not splitting out HRA from total salary
  • Excess tax deducted due to not filing Form 15G/H on time for interest or dividends
  • When your company did not consider all the proofs you submitted for 80C and HRA deductions

etc.

Recent articles:
1 / 3
<p>A quick retirement calculation for a reader query who has a good amount of corpus already saved for retirement.</p>
2 / 3
<p>This article explains the PFRDA announcement about a new default scheme under NPS Tier II for government employee subscribers.</p>
3 / 3
<p>As per SEBI rules, mutual fund investors must have nominees in their folios by 1st October 2023 or explicitly opt out. Otherwise they will face restrictions in selling units.</p>

Join the Arthgyaan WhatsApp community: You can stay updated on our latest content and learn about our webinars. Our community is fully private so that no one, other than the admin, can see your name or number. Also, we will not spam you.

What are the basic checks when you get a windfall?

Whenever you get some extra money, a few basic health checks should be made regarding your financial life:

If any of these are incomplete, please complete them before moving on to the next step. Consider if there is some small expense that you want to make, as a white goods purchase or a vacation, then allocate that money now. You will be investing the remainder as per goals in the same asset allocation as specified in your goal-based investing plan.

What you should not do right now?

Suddenly having a bit extra money makes it easier to spend it. We are not against spending an extra ₹50,000 for a new phone, trip or white goods. However, just because you have some money now does not mean that you get swayed by your bank relationship manager or insurance agent to buy an ULIP, pension, endowment plan or something similar. You can read more on this point here: The agency problem in personal finance. What should you do?.

Do you have a financial plan already?

We insist that all investors should invest after creating a financial plan. Without a financial plan there are a lot of avoidable mistakes that tend to get made: 12 mistakes that interrupt compounding: what to do instead.

If you don't have a financial plan as of now, you can follow these case studies to create your own:

How to adjust your financial plan with this extra money?

Arthgyaan Have vs Needs Framework

Since your bank account now has more money, you can add this to your cash bucket and then use the Arthgyaan Have-vs-Need framework to reallocate this extra money into your other goals: How to invest a lump sum amount for your goals?.

What's next? You can join the Arthgyaan WhatsApp community

You can stay updated on our latest content and learn about our webinars. Our community is fully private so that no one, other than the admin, can see your name or number. Also, we will not spam you.

If you liked this article, please leave us a rating

The following button will take you to Trustpilot:

Discover an article from the archives

Worked out case studies for goal-based investing

Previous and next articles:

<p>Sovereign Gold Bond (SGB) 2023-24 (Series II): know all the details about it to decide if you should invest.</p>
Gold
Sovereign Gold Bond (SGB) 2023-24 (Series II): Who Should Invest?

Sovereign Gold Bond (SGB) 2023-24 (Series II): know all the details about it to decide if you should invest.

Published: 11 September 2023

6 MIN READ


<p>As the market keeps rising to new all-time high figures, how much returns should equity investors expect from their investments running in SIP form.</p>
Market Movements
Nifty above 20000: what should you do with your equity SIPs? Start, stop or continue?

As the market keeps rising to new all-time high figures, how much returns should equity investors expect from their investments running in SIP form.

Published: 17 September 2023

3 MIN READ


Latest articles:

<p>This article shows a handy ready reckoner for home loan EMI amounts for all tenures and interest rates along with the amount of principal and interest to be paid.</p>
House Purchase
How much EMI do I have to pay for my home loan?

This article shows a handy ready reckoner for home loan EMI amounts for all tenures and interest rates along with the amount of principal and interest to be paid.

Published: 29 September 2023

1 MIN READ


<p>A quick retirement calculation for a reader query who has a good amount of corpus already saved for retirement.</p>
Retirement Reader Questions
How much money does this 39 year old investor need to invest per month to retire at 58?

A quick retirement calculation for a reader query who has a good amount of corpus already saved for retirement.

Published: 27 September 2023

7 MIN READ


Topics you will like:

Asset Allocation (20) Basics (8) Behaviour (10) Budgeting (11) Calculator (17) Case Study (6) Children (12) Choosing Investments (38) FAQ (6) FIRE (13) Gold (11) Health Insurance (4) House Purchase (17) Insurance (15) International Investing (10) Life Stages (2) Loans (9) Market Movements (13) Mutual Funds (29) NPS (6) NRI (13) News (9) Pension (8) Portfolio Construction (46) Portfolio Review (27) Reader Questions (6) Real Estate (6) Retirement (36) Review (12) Risk (6) Safe Withdrawal Rate (5) Set Goals (27) Step by step (14) Tax (37)

Next steps:

1. Email me with any questions.

2. Use our goal-based investing template to prepare a financial plan for yourself
OR
use this quick and fast online calculator to find out the SIP amount and asset allocation for your goals.

Don't forget to share this article on WhatsApp or Twitter or post this to Facebook.

Discuss this post with us via Facebook or get regular bite-sized updates on Twitter.

More posts...

Disclaimer: Content on this site is for educational purpose only and is not financial advice. Nothing on this site should be construed as an offer or recommendation to buy/sell any financial product or service. Please consult a registered investment advisor before making any investments.

This post titled Maximizing Your Finances: Smart Moves for Your Tax Refund Windfall in India first appeared on 13 Sep 2023 at https://arthgyaan.com


We are currently at 299 posts and growing fast. Search this site:
Copyright © 2021-2023 Arthgyaan.com. All rights reserved.