Tax Wise: Expert advice on investments

TAX SOLUTIONS: Each tax payer must learn how to sail through his taxing queries.

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Tax expert, Subhash Lakhotia tells you how to sail through your taxing queries on CNN IBN's special series on investment solutions and advice.

Query: I am Gurtek Singh Kannu working as a Senior officer in private company. I am keen on investing. Should I start investing now (in the months of August – September) or should I wait till next year?

Ans: In younger times you must have studied in school,"early to bed and early to rise makes you healthy, wealthy and wise." The same applies to investment as well.

The earlier you start investing; better would be the returns in the long run. If you invest today, you get more time to liquidate this money, which will mature in five years in case of bank fixed deposits and in three years in case of Equity Linked Structures Funds.

Tip:To get the full benefit of the various deductions and exemptions one needs to start early investing. The earlier you invest the more would be the benefits you reap.

Query: Aren't most investments based on 'income of the year'? What does this term means?

Ans: The provisions of the tax laws have been completely changed in the past two years. The time when investments were supposed to be made from the 'income of the year' is a thing of the past.

Investments can be made (with the view of getting tax benefits) out of the income of the year or even from the non-income of the year, it hardly makes any difference. So do not worry and start investing right now.

Query: Does it make any difference if one is married or if there is a change in the income level?

Ans: No, it does not makes any difference whether you are married or unmarried, same level of tax benefits are available to all categories of tax payers.