As we already know, our Financial Year starts in April and ends in March. We get the entire year to invest for tax-saving purposes. However, people rush at the eleventh hour, and it is observed that maximum tax savings investments come in the month of March only. Logically, either your investments should be distributed throughout the year in a span of 12 months or if it is a lumpsum investment then instead of investing at the end of the financial year, one should plan to invest at the beginning of the year always. That way you get enough time to plan for your finances and therefore take care of taxes if you do so at the beginning only. Otherwise, in the last movement, you only focus on tax saving and not on the scheme or policy details whether suits you or not.
The problems with the people have; when they plan early:
- They try to procrastinate being human nature
- They never feel they have enough to save
- Investment remains their least priority
- Want to spend first than savings
- Get tempted for spending to buy instantly / window shopping
- Don't invest unless getting a TDS deduction
- Never follow 'to pay yourself first' rule
- Don't plan anything - neither investments nor expenses
Everyone knows that spending sensibly and saving regularly is key to financial security. Yet, many are not able to save as much as they want to. Worst even, many missed the last ball too and realize only after when the financial year gets over. One needs to understand that investing in tax-saving instruments is important not just for the time being but also for the long run. When one invests in a tax-saving instrument, they save tax and at the same time save up for the various goals they need to meet at different life stages. This efficient tax planning should ideally be done at the start of the year. To go easy on the pocket, one can start something as simple as a SIP in ELSS. It ensures regularity and discipline of investment while serving the purpose of saving tax.
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