Later accomplishing the work of successfully submitting the assets proofs for the Fiscal Year 2015-16, have you set tax-saving investments on the back burner until the next email comes from your employer asking for proofs again in the month of Jan.?
Well, we will advised you to aspect at a various tricks a kind of resolve for the fresh fiscal year of 2016-17. Instead of thinking own tax-saving assets towards the fag end of the fiscal year, beginning right now in April at the beginning of the fiscal year. As they say, early bird catches the worm, we say the early saver builds more wealth. Now, you will question why should I block my money for the entire year when I can defer it till the past quarter of the year. We have 5 healthy explanations to discussion you out of the custom of past minute tax planning.
Decreased burden in past quarter
The beginning of the year is when you have just received a increase in income and you are still planning what will you do with the additional amount you will pocket. Instead of planning ways to expend it on luxuries of life, channel them into savings. This could be by way of growing your home loan EMI to help you cut the loan burden and even desire the total loan tax benefit. You can spend it in PPF in a staggered way now that the comfort of online payments is available. New Pension scheme, Sukanya Samriddhi, Insurance or tax-saving mutual funds are other options to divert the additional income for the fresh year.
This will cut the burden of high savings that you face toward the close of the fiscal year, when hefty taxes eat into your salary to meet the annual taxation limits.
Money has more time to develop
You will earn the interest for a longer time period and the power of combining will come into play. For example, under PPF interest is credited on the deposits invested before fifth of each month. Sooner you put, more you see in your account at the time of maturity, if you are considering traditional fixed income assets options.
Buy amount averaged out
If you are the one who options for equity investments such as tax-saving mutual funds or unit-linked insurance plans, then investing regularly at various intervals during the year will assist you average the cost of buy. So, if you support investing Rs 5000/month, then some months you will put at lower market levels, while others at higher ranges. You will be thus secure from investing money all at one go, when the markets may be high, thus reducing the overall profit.
No wait in claiming profits
Various individuals fail to either put before the due date or fail to submit proofs. They do spend at the past minute. Thus they end up coughing up high taxes during the past quarter and late have to claim an income tax repayment. Such traders will not be able to earn extra assets income out of such amount to be claimed as repayments.
Anticipation these are convincing enough to get you into tax-saving mode at the beginning of the fiscal year. So, be at peace to plan for yourspring summer holiday as the savings will be on automatic-mode with prior planning at the beginning of the fiscal year.