1. Tax-planning means exercising your right to financial and budgetary interpretations for legitimate tax-saving, as opposed to tax-avoidance which is disregard of taxation laws altogether.
2. The misconception between tax-planning and tax-avoidance, both as different as chalk and cheese, often leads many investors, both young and old, in going for lesser efficient long-term investment of their hard-earned money.
3. Have a tax plan ready early in the year by estimating how much of tax-saving avenues are utilized, and ensuring a deadline for its execution, after estimating likely taxable income, allowed exemptions and deductions.
4. Include investments that offer high post-tax returns, instead of those which save taxes but offer lower post-tax returns on a net basis.
5. Don’t invest in multiple products whose invested sum becomes more than what is required to get the maximum tax benefit available.
6. Ignore policies with low benefits - but fat commissions.
7. Don't rush for investments during J-F-M months, instead of opting for monthly SIPs for the whole year.
8. Avoid payment of premiums in a single month, instead of spreading them over the year.
9. Don’t treat tax planning as the last step before filing income tax returns, but something that should be taken up at the beginning of every financial year.
10. Charity begins at home, however small the tax benefits, especially towards your hard-earned money, as today's water drops are tomorrow's rivers.
2. The misconception between tax-planning and tax-avoidance, both as different as chalk and cheese, often leads many investors, both young and old, in going for lesser efficient long-term investment of their hard-earned money.
3. Have a tax plan ready early in the year by estimating how much of tax-saving avenues are utilized, and ensuring a deadline for its execution, after estimating likely taxable income, allowed exemptions and deductions.
4. Include investments that offer high post-tax returns, instead of those which save taxes but offer lower post-tax returns on a net basis.
5. Don’t invest in multiple products whose invested sum becomes more than what is required to get the maximum tax benefit available.
6. Ignore policies with low benefits - but fat commissions.
7. Don't rush for investments during J-F-M months, instead of opting for monthly SIPs for the whole year.
8. Avoid payment of premiums in a single month, instead of spreading them over the year.
9. Don’t treat tax planning as the last step before filing income tax returns, but something that should be taken up at the beginning of every financial year.
10. Charity begins at home, however small the tax benefits, especially towards your hard-earned money, as today's water drops are tomorrow's rivers.