Beware! Never commit these 5 mistakes while planning for tax savings
Tax planning season is ON and every salaried and business owner is ready with their tax submissions and planning for the next year. A good tax planning requires a good study of tax parameters, and also planning with respect to any investments that could be made in order to save more taxes for the year.
The money we earn with our hard work and dedicated efforts, we would definitely want them to be saved if possible by either way. Some of the ways that tax can be saved are investments, donations, and insurances. Perhaps, there are instances where you might end up making mistakes in this tax saving activity. Therefore, this blog will read out such mistakes which must be avoided and ensure that it is never committed by your side.
- Investing all at same place and in a rush:
One of the most common mistake for investors. The reason for this could be anything from lack of time or lack of knowledge but it may be risky to your expenses and savings. There are a number of areas where you can invest your savings with every area possessing different interest rates of return or profits in future. With the undeniable fact of risks in such areas you might end up losing all your money. So investing in different areas will not surely win you profits but it may lower the chances of loss.
- Not hiring a professional:
This will straight away eliminate any chances of getting lost in your accounts or making errors. Here, by professional I mean hiring a CA. They help you save more on taxes through best possible ways abide by law in order to grow your business. Avoiding such leverages could sink your earnings. Although the choice is yours – Whether to hire an accountant or an automated accounting software which automates all your payroll and tax based operations.
- Forgetting about retirement plans:
We all love earning a hefty salary and spending them. What happens when saving is the concern? Why do we become lazy to act for saving an amount for the days after your retirement? You might think that gradually saving money for last few years will work, then you are missing it. It won’t work. You must start saving from now when you really could rather delaying it.
- Keeping your decisions stalled:
Yes! This is the root of every failure you face while tax saving or planning. Keeping your decisions at halt for longer and not acting upon it could lead into losing your best timing. After you have done a healthy research on tax parameters and familiar with every possibility, act instantly. Remember this – “Sooner you begin, more you gain”.
- Getting restricted to 80C:
Well, section 80C provides many proven investment areas for good returns thus saving your tax expense. The problem arises when you get stuck at same and miss out bigger opportunities lying next door. So what’s beyond 80C? There lies sections like 80CCC, 80D, 80G, 80GGC and much more housing areas like pension fund of LICs, medical insurances, donations to charities, contributing towards political parties, etc. respectively. So be informative and flexible while making any decision.
These were some of the basic mistakes which people make while planning for tax savings. Hence, whenever you feel like investing your earned money do thorough research and go ahead. Don’t forget to know the terms and conditions for the investing area you are investing in. There are automated platforms dedicated to HRs which could help you save much more than tax. Pocket HRMS is one such platform.
Willing to know more about how you can successfully save more on tax? SMS SAGE to 56767 or write to us at email@example.com for a free consultation.