Tax Saving Tips: The month of March has come to an end. In such a situation, the deadlines for many financial tasks are going to end soon, in which investing for tax saving is important. If you want to avail the benefit of tax exemption in the financial year 2023-24, then you have the last chance to invest. Many times, while doing tax planning at the last moment, taxpayers make some mistakes due to which they have to face problems later. If you are doing tax planning before March 31, then do not make these mistakes –
Avoid making these mistakes while investing for tax-saving –
1. Not investing as per need-
Many times people do not choose the right schemes while investing for tax saving at the last moment. If you want to get big benefits in the long run then PPF can be a safe investment option. Whereas through NPS you can plan your retirement. While choosing all these schemes, keep your needs in mind.
2. Avoid investing more than necessary –
If you are investing for tax saving, then keep in mind that avoid investing more than necessary. For example, if you have taken a home loan, then you will get the benefit of tax exemption on the interest part of its EMI under Section 24 of Income Tax. Rebate on principal amount will be available under Section 80C of Income Tax. In such a situation, if you are investing in PPF only for tax exemption, then keep in mind that you should not invest more than your requirement because the maximum exemption limit under Section 80C of Income Tax is only Rs 1.50 lakh.
3. Not investing in different schemes
Many times taxpayers do not diversify their investments while investing for tax saving. In such a situation, they have to face problems later. You should try to invest in different schemes as per your need. For example, you can invest in schemes like PPF for long term. There are also options like ELSS funds available for good returns.
4. Not doing proper financial planning
Many times people do not do proper financial planning while saving tax at the last moment. Due to this they have to face problems later. In such a situation, try to plan your investment only after properly investigating the future returns and benefits of any scheme before investing in it.
5. Not knowing about all deductions
According to the old tax regime, apart from the exemption of Rs 1.50 lakh under Section 80C of Income Tax, taxpayers get the benefit of many other types of tax deductions. In this, an additional exemption of Rs 50,000 is available under section 80CCD(1b) on investing in NPS. Apart from this, one also gets the benefit of tax exemption on interest rate on home loan and on taking medical insurance etc. In such a situation, while investing for tax saving, do not forget to include all these deductions.
Read this also-
Get more latest business news updates