Common Mistakes during Tax Planning
All of us want to save
tax more and more or in fact no one want to pay tax happily. Most of us don’t
plan in the beginning of financial year. We awake for it when our office accountant
remind us or our CA. The main reason behind wrong tax planning is to wait last
moment of financial year (Feb-March) closing. In the hurry of tax planning in last
moment we often ignore the essential element of financial planning like our financial
goal, risk appetite, income and investment product.
If you have ever felt
that during Jan to March we will get so many telephone calls from insurance
company for ULIP (Unit Linked insurance Plan). ULIPs are insurance cum
investment product and have many charges which are not mostly disclosed by an agent.
In fact you should not mix your insurance with investment, one of the golden
rules of financial planning. In these products, you don’t get adequate risk
cover so your insurance planning spoil and you get raw deal in the hurry of tax
saving.
We often do not optimize
all tax saving options. Many of us only stuck with Section 80(C). There are
also so many other options exist which you should explore with the tax expert.
There are many other relaxation of tax like medical treatment of dependant
handicapped, loan for higher study, suffering from specified diseases and many
more.
If your age, income and risk
appetite allow you to some degree risk you must invest in ELSS mutual fund.
These funds come with 3 year lock in period and worth for invest. It is the
good option for tax saving. If we keep in mind the
mentioned things in this article, we can make optimal financial planning.
For more detail about any other query related investment,
you can contact me through my email.
Regards,
Arvind Trivedi
Certified Financial Planner
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