Search Your Query Here

Right Time for Tax Planning: Essential Tips

People can be seen frantically searching for viable investment options in the last quarter of the fiscal year with the core objective of reducing the heavyweight tax burden. The exercise of legally managing tax and taking a step forward in direction of financial goal fulfillment is known as tax planning.

But have you ever wondered why this sudden surge of tax planning requirement crops up from the month of March? Well mostly people view tax planning as a one-time mandate and try to squash out the maximum possible benefit from the same but technically; tax planning should be started at the very onset of the financial year.


 o Fewer burdens at financial year end with investments spread out over a 12 months horizon.
 o Winning over risks associated with funds locked down in unsuitable avenues.
 o By clever tax planning, assesses can claim a deduction of 150000 INR u/s 80C of Income Tax Act 1961. Furthermore a deduction of 25000 is available to taxpayers on account of premium paid for health insurance policies. (30000 INR for senior citizens) 
 o A properly planned investment can go a long way in securing the future. But this can only be achieved after evaluating the available options to take a well informed decision rather than jumping onto the easiest available option. With an array of investment options available in the market like EPFs, ULIPs, PO Deposits, Senior Citizen Savings Schemes, education loans repayment, PPFs, home loan repayment nobody would go for multiple policies having same benefits.

When is the right time?

Just like a host of other things, tax planning also comes with early bird opportunities. Starting early can help out in saving more from the tax burden. Unlike popular practice, financial year end is not one of the best times to start with the tax planning rituals as assesses might be under tremendous cash flow constraints. Thus it is advisable to target April denoting the beginning of a new fiscal to get their investments in motion. However in some cases outside their control, people are not able to do so.

If you are thinking of some last minute options, then you should brush through investments which guarantee issuance within stipulated timeframe for you to submit the investment proof for availing tax benefits while filing return. Such investment options should be such that they do considerable value addition to the financial portfolio and also help out in securing maximum benefit.

Do it right

 o Determination of tax liability and amount assesses wish to claim as deduction based on income estimates.
 o Determination of fresh investments to be made.
 o Choosing the right instrument.

A Few Considerations

 o Goals
 o Lock in period
 o Risk appetite
 o Taxability of Income
 o Inflation
 o Personal Tax Slab


In a nutshell we will advise people to start early and continue their investment throughout the year so that they can make the most of tax saving opportunities by the year end. Investing in a staggered manner throughout the year can also avoid year end liquidity crisis and uncalled for paperwork. 

About the Author

Pratik Rakte (Digital Marketer)
An enthusiast person with background of finance and digital marketing. Graduate in Financial Market with hands on financial investment working as Digital Marketer for financial planning company.