Don’t make the mistake of investing at the last hour when our company asks for proof. So, don’t delay it. Start Tax Planning now.
START IN APRIL
Why should you wait for the end of the year to invest in Tax-saving investments? April is also the best time to start. There are multiple benefits.
TAX CHANGES ANNOUNCED
By April, the Union Budget would have been announced. This means, you have a good idea about any Tax changes in the new fiscal.
KNOW YOUR TAXES
You also know about your salary hikes and tentative incomes by the start of your financial year. This is enough to calculate your Tax payments too.
Using the two data sets, calculate how much you can invest to cut Tax. Under Section 80c, you can reduce taxable income by 1.5 lakh. There are other options too.
SPREAD OUT INVESTMENTS
If you invest at the end of the year, you will have to shell out 1.5 lakh or more in a single lump-sum payment. By planning earlier, you can avoid this.
Equity-linked Savings Schemes are special Mutual Funds for saving Tax. You can start a Systematic Investment Plan (SIP) in ELSS right in April. This spreads out your investments.
NO LIQUIDITY CRISIS
When you shell out 1.5 lakh in a single dose, you are more than likely to be cash-strapped in the month or two after. You can also avoid this by starting to invest early.
SMALL MONTHLY PAYMENTS
So, break the 1.5 lakh (or higher) investment amount by 10 or 12- the number of months you invest. This will also get you to a lower figure of few thousands.
RUPEE COST AVERAGING
By investing every month, you can also benefit from the volatility in the Stock markets. You can lower your average cost of investment by investing every month.
By lowering your average cost of investment, you can increase your overall returns in the long run. This way, your Tax-related investments can help create more wealth.
MUTUAL FUND Tax Saving schemes
MUTUAL FUND BY INVESTMENT OBJECTIVE
YOUR RIGHTS AS A MUTUAL FUND UNIT HOLDER