The best time to start planning your tax-saving investments is at the beginning of the financial year. Most taxpayers procrastinate till the last quarter of the year, and end up taking hurried decisions. Instead, if you plan at the start of the year, you can make investments that can also help you fulfill your long-term goals. Tax-saving investments should be used to build wealth as well, not only to just save tax.
Use the following pointers to plan your tax-saving for the year:
- Check the tax-saving expenses that you’re already making that you can claim. This includes expenses like insurance premium, children’s tuition fees, EPF contribution, home loan repayment etc
- Deduct this amount from ₹1.5 lakh to figure out how much to invest. The entire amount doesn’t need to be invested if expenses are covering it.
- Choose tax-saving investments on the basis of your goals and profile. ELSS funds, PPF, NPS and fixed deposits are some of the popular options.
This way, you can figure out how much you need to invest to save taxes. It is best to begin investing in the first quarter of the financial year so that you can spread the investments over the year. Doing this won’t burden you at the end of the year and will also allow you to make informed investment decisions.