The utterance of the word “tax” emits a negative feeling in most people. It is not only about the realms of the real world, but in the iconic Bollywood film Lagaan that was based on a fictional story dating a century back, the protagonist had a “fear of paying tax”.
Well over the years, terms like “evasion”, “concealing”, “provision” and “savings” have been commonly associated with tax related issues. It is primarily because taxes are seen more as a burden to the common man. So, we get to see that on rare occasion that “planning” is associated with tax related matters.
Free Financial and Investment Assistance Portal, MoneyMindz talks about managing your finances wisely in order to save taxes. One question which engulfs many minds will be, “How can I part with my hard earned income with the government?” Majority of us try our best to minimize the impact of taxes.
When someone offers “quick fix solutions” to reduce tax outflow from one’s pocket, everyone from salaried employees to professionals, entrepreneurs and corporates could ponder over it or give it a second thought.
The months from January to March spell chaos as there is a rush to complete last minute tax saving measures for the salaried class. It is the time when year on year unwanted insurance-cum-investment policies are purchased and forgotten as quickly, as they were purchased for only saving taxes.
You will find cases where young couples invest in property to avail tax benefits on the interest paid on a home loan. It is regardless whether the purchase is affordable or even required.
So you need to remember that it is imperative for everyone to look at all financial aspects to achieve financial goals. Therefore, tax planning is important part of saving money, but not the ultimate motive.
People usually forget that tax planning is a simple process which eventually amalgamates with financial planning. And also the decisions taken as part of the financial planning process should find a place by default in your tax planning.
The commonly used sections for tax savings provide deductions and eligibility formulated in a thoughtful manner that easily merge with an individual’s financial profile.
There are provisions possible for long term investments in fixed income through EPF and PPF – two of the most tax efficient guaranteed investment products. Therefore, equity investments are covered through ELSS, premium for term plan insurance is deductible, health insurance premium for you and your dependants is considered and your home loan interest and principal amounts are also covered.
Also beyond these, an individual’s investments should be diverted in appropriate financial assets linked to their goals. Therefore, a tax on time is the duty of every citizen and let this process not “tax”, but “relax” you.
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