Tax planning is crucial in financial planning. However, taxpayers often commit simple mistakes that affect their tax liability and overall financial objectives
Start Early
Begin evaluating investment options at the start of the year based on potential return on investment, and not just tax benefits
Common Mistakes
Errors such as failure to keep accurate records, claiming deductions without supporting documents, overlooking deductions and credits, and not keeping abreast of changes in tax laws are typical tax-planning mistakes
Tax Deductions
Failing to take advantage of tax deductions and exemptions available under Section 80C and 80D is one of the most significant errors
Beyond Tax Saving
It can be a mistake to invest solely for tax-saving purposes. Consider other factors like risk profile, returns, liquidity, and suitability for financial goals
Plan for Long-term Goals
Neglecting to plan for long-term financial goals can harm overall financial planning
Proper Documentation
Keeping proper documentation is crucial for tax planning to avoid errors in tax filings and notices from the IT Dept
Regular Reviews
Regularly reviewing tax-planning strategies is vital to stay updated on the latest tax regulations and make necessary changes to maximize tax savings
Three Tax Saving Options
The best ways to save money, create wealth, save taxes, and have liquidity are through health insurance, term insurance, and ELSS, also known as tax-saving mutual funds