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Smart tips: invest early to save tax
Published on Mon, Sep 25, 2006 at 13:17, Updated on Mon, Sep 25, 2006 at 13:56 in Money » Tax section
Tags: Investments, Tax Savings , Mumbai
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Mumbai: More than six months to go for the closing of the financial year and the question that might arise in your mind is whether it is the right time to invest for saving tax. Generally speaking, most tax payers start the process of investing in various instruments in the month of March to achieve their targeted quota of investment, which would bring them tax saving.
A large cross section of taxpayers feel that well within the framework of the income-tax provisions as are existing as on today, the choice lies with the tax payer to make investment for tax saving at any point of time during the financial year.
Because of this provision existing in the statute book, the general tendency of the tax paying public of India is to get ready with the money for investment almost at the fag end of the close of the accounting year.
However, for a prudent investor, it would really be best right now to start thinking of making investment in tune with the tax provisions for achieving the optimum deductions as are permissible in the Income Tax Law.
Sooner the better would be the mantra for prudent investor to make his investment much ahead of the deadline of March 31, 2007. Therefore, an old saying, early to bed and early to rise is the only way to be healthy, wealthy and wise, holds good today.
Well, the dictum of this famous phrase can be applied with success to the theme of investment planning for tax saving. Yes, it is right time to invest early so as to achieve the goal of better financial bliss in the wonderland of investment planning.
1. Don't get into a last minute trap
If you are tuned to make the investment much ahead of the accounting year then the first big advantage that you enjoy is you prevent the last minute risk of gathering your funds for investment.
Because who knows, due to some pressing commitment at the end of the accounting year, in spite of your best effort, it might not be possible for you to make your investment in tune with the tax provisions for receiving a tax deduction from the income of the year.
This happens to be one first solid reason why you should now start make investment for enjoying the tax deduction in respect of current year's taxable income.
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