Is only tax
saving important enough?
Jan to
march, in this quarter people rush for tax saving. Some people wait till last
week of the march and make a investment decision in hurry. Often they stuck
with those investments which they don’t need and return also come very poor. In
today’s article we will discuss about some points which are also important when
you make investment decision for tax saving.
- · Before go to nearest bank, investment advisor or your CA do your proper homework.
- · Avoid to rush for save tax. Make your tax planning well before the end of financial year. It will prevent you make wrong decision in hurry.
- · Do not purchase a small new insurance or ULIP policy every year. Keep in mind your section 80(C) limit. You can save only upto Rs lakh including all your investment and expenses under this section .
- · If you are salaried, calculate your PF and PPF contribution, HRA if applicable. Your principal repayment on home loan and tution fee for children also come under section 80(C).
- · Today’s many government backed companies bonds like IIFCL (Indian Infrastructure Finance Company), IREDA (Indian Renewable Energy Development Agency) and many more in the market. It is good for long term investment and safety points but it is not as good if you need liquidity in short to near term.
- · The return of these bonds are tax free but the investment in these bonds are taxable. These bonds are not under section 80(C).
- · Tax planning mutual funds (ELSS) have the shortest lock-in period of 3 years and PPF (Public Provident Fund) have longest lock-in period of 5 years.
- · If your investment horizon more than 5-7 years then the most suitable option is ELSS for tax saving.
- At last the more important thing please do not ignore return and liquidity need in rush to save tax.
For more detail and any
other query related investment, you can contact me through my email.
Warm regards,
Arvind Trivedi
Certified
Financial Planner
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