Aman and Raj sit at their favorite café, a cozy corner by the window, sipping on steaming cups of chai. Outside, the streets of Mumbai are alive with honking rickshaws, street vendors calling out their wares, and the occasional whiff of spicy chaat filling the air. March has arrived, and with it, the pressing need to sort out their finances before the financial year comes to a close.
“March is not just about taxes, you know,” Aman says, stirring his tea slowly. “It’s also the best time to reassess investments, rebalance portfolios, and plan for the future. Let’s go over the ten things we must focus on before the 31st.”
1. Tax Harvesting Before 31st March
Aman leans forward, resting his elbows on the table. “Have you thought about tax harvesting?”
Raj takes a sip of his chai, then nods. “You mean selling underperforming stocks at a loss to offset capital gains?”
“Exactly,” Aman confirms. “It’s a strategic way to reduce tax liability while maintaining your portfolio allocation. Once you book the losses, you can reinvest in similar assets so your investment strategy remains intact.”
“I did that last year,” Raj recalls. “It helped me save on capital gains tax while keeping my investments on track. I should check my holdings again.”
2. Maximising Section 80C Benefits
“Are you making full use of Section 80C deductions?” Aman asks, taking a small bite of his samosa.
Raj quickly checks his phone. “I still have some room left to invest. Equity Linked Saving Scheme (ELSS), Public Provident Fund (PPF), or National Pension Scheme (NPS)—what do you suggest?”
“It depends on your financial goals. ELSS is great if you want equity exposure with tax benefits, PPF is for long-term security, and NPS gives additional retirement savings advantages. See, diversification is key!”
Raj makes a mental note to top up his PPF before the month ends.
3. Reviewing Advance Tax Payments (15th March Deadline)
“Don’t forget the 15th March advance tax deadline,” Aman reminds him, checking his own notes.
Raj sighs. “Yes, I need to check my total tax liability. If it’s more than ₹10,000, I should pay to avoid penalties.”
“Make sure to include capital gains and interest income while calculating,” Aman advises.
Raj opens his tax portal, quickly reviewing his financial statements.
4. Tracking and Understanding RBI’s Monetary Policy
“Did you catch the latest RBI Monetary Policy announcement?” Aman asks, raising an eyebrow.
Raj nods. “They cut the repo rate to 6.25%. That means cheaper loans and a potential boost for the stock market. My bond investments might see some capital appreciation too.”
“Exactly. Lower interest rates usually push equities higher, but debt investors need to stay alert.”
5. Financial Year-End Market Volatility
Raj talks about market dip. “Markets always get volatile this time of the year, don’t they?”
“Yes,” Aman agrees. “Foreign and domestic institutional investors rebalance their portfolios, and there’s a lot of profit-booking happening. The key is to stay calm and use the dips as buying opportunities.”
“That’s a good strategy. We must keep some cash handy in case of a correction.”
6. Reviewing Mutual Fund Portfolios
Aman takes a deep breath. “When was the last time you reviewed your mutual fund holdings?”
Raj logs into his investment app. “One of my equity funds has been underperforming for months.”
“Compare its performance against its benchmark and peer funds. Also, check the expense ratio and whether the fund manager has changed recently. Sometimes, a change in management affects the fund’s strategy.”
Raj nods. “Good point. I’ll make a decision after analyzing it further.”
7. Checking for Dividend Announcements
“March is dividend season,” Aman points out. “Have you looked at upcoming payouts?”
Raj scrolls through his holdings. “ITC and Coal India have solid dividend yields.”
“Not bad,” Aman says, nodding approvingly. “But remember, dividends are taxed at your slab rate. For high-income investors, capital appreciation might be a better strategy.”
8. Impact of Global Events on Indian Markets
“Speaking of market fluctuations, have you been keeping up with global events?” Aman asks.
Raj sighs. “Barely. What’s happening?”
“The US Fed’s March meeting is crucial. If they hike interest rates, foreign investors might pull money from Indian markets. Also, crude oil prices and geopolitical tensions are impacting various sectors.”
“I should definitely stay updated on that,” Raj admits, making another note on his phone.
9. Evaluating SIPs and Rebalancing Asset Allocation
Aman stretches his arms. “Have you checked your SIPs recently?”
Raj swipes through his investment dashboard. “My equity exposure is high. Maybe I should shift some gains to debt funds.”
“Smart move. Rebalancing ensures that you’re not overexposed to risk. If you don’t want to manage it manually, multi-asset allocation funds could help.”
10. Reviewing Upcoming IPOs and Market Trends
“March is always an IPO-heavy month,” Aman notes. “Remember how Mankind Pharma’s IPO gave a 30% listing gain last year, but Yatra Online disappointed?”
Raj nods. “I’ll research fundamentals before applying. Not every IPO might be a winner.”
Wrapping Up!
As they tick off each item, Raj leans back, feeling more confident about his finances. “Thanks for this, Aman. I’ve covered everything on the list.
Aman grins. “Good job! Investing is all about discipline and planning. March is just another checkpoint on the journey to financial freedom.”
Now, let’s see how the markets play out this month as it has been bearish for quite a long spell.”
Raj finishes his chai, feeling reassured. With a solid action plan, he knows he’s making the most of this crucial financial month.
Interested in how we think about the markets?
Read more: Zen And The Art Of Investing
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