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This week in personal finance: Things to remember while filing your ITR; ways to maximise investment returns

The countdown to the July 31 deadline for filing your income tax returns has begun. In case you have not filed your returns, try to get it done as early as possible. In case you miss the deadline, there are stiff penalties that would be levied.

However, in your hurry to file the returns, do not fill in wrong entries or miss out on some declarations that you need to make. Many a times, taxpayers miss a few things which are not always on top of their mind while filing the returns. Some of the items may not figure in your Form 16 provided by the employer.

Among the items that taxpayers struggle to decode is the way one can claim exemption on one’s House Rent Allowance (HRA) while filing tax returns. Well, you can claim HRA exemption benefit only when you are living in a rented house. Those who live in their own house cannot avail tax exemption benefit on HRA.

In fact, the exempt HRA amount can be seen in the tax projection statement provided to you by your employer at the beginning of the financial year. The employer deducts the HRA from salary. When it comes to filing of ITR, you can view the deduction in Part B of your Form 16.

The equity market has not seen much action during the week. However, you need to keep your investment plan intact and have realistic expectations on your portfolio returns. Having unrealistic expectations from your investments can lead to disappointment, especially when the instrument you are investing provides market-linked returns.

So, how would you analyse whether you are getting good returns on your investment? One way is to link the expectations to a financial goal which has a certain time horizon for its accomplishment.

To chase high returns, equity investors often end up following investment moves of celebrity investors such as Rakesh Jhunjhunwala, Poriju Veliyath and Dolly Khanna. However, one should not get carried away and buy those very stocks without doing their own due diligence. Failing to do so can lead to erosion of capital.

On the life insurance front, the amount of cover required for a person changes with changing lifestyle and age. Also, the rate of inflation necessitates a higher level of coverage in later years of life. Therefore, to estimate the correct amount of sum assured, you should ideally go for incremental term insurance plan instead of a basic one.

To facilitate growth in the non-life and health insurance business in the country, the Insurance Regulatory and Development Authority of India (IRDAI) introduced a new type of distribution model called point-of-sales person (PoSP), who are engaged either directly by insurers or by intermediaries such as corporate agents and insurance brokers.

Finally, when it comes to writing a Will, there process has been made simpler by online services now available to execute the document. Whether the will is prepared using online services or one engages the services of a lawyer for getting the same drafted depends on one’s financial and personal circumstances.