I was about to file my returns and felt the need to better plan my taxes for this year. What should I do?
Tax-saving investments should be used to build wealth as well and not just to save tax
I was about to file my returns and felt the need to better plan my taxes for this year. What should I do?
Rajesh Mathur, Noida
You are absolutely right in starting now with your tax planning for 2017-18. It is usual for taxpayers to start at the end of the year to save on taxes or till such time when the accounts department of your office does not call up seeking proof of tax savings. The advantage of starting early – you can make investments that can also help you fulfil your long-term goals. While at the subject, do not work towards saving taxes for the sake of it – tax-saving investments should be used to build wealth as well and not just to save tax.
You could do this by checking the tax-saving expenses that you’re already making that you can claim. This includes expenses like insurance premium and children’s tuition fees and anything else that you can claim from the Rs 1.5 lakh limit that exists under Section 80C of the income tax Act. Choose tax-saving investments on the basis of your goals and profile. ELSS funds, PPF, NPS and fixed deposits are some of the popular options. This way, you can figure out how much you need to invest to save taxes. Make a start if you have not started already and work towards maximising your tax savings.