Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: VAT RATES :: form 3cd :: cpt :: VAT Audit :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment :: articles on VAT and GST in India :: TDS :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: ACCOUNTING STANDARDS
News Headlines »
 How to save income tax? Here are 6 investments with tax free income
 10 Top salary deductions that can save tax for you
 What are the tax saving options beyond Section 80C?
 The penalties for not paying tax on time
 How to make your salary tax efficient
 I-T Department may go into overdrive this quarter
 Ways to reduce the TDS deduction from your salary
 4 Tips for choosing who prepares your 2017 Tax Returns
 Processing of income-tax returns under section 143(1) of the Income-tax Act which were filed in Forms ITR-1 to 6 & applicability of section 143(1)(a)(vi)
 Price Waterhouse gets 2-year ban in Satyam case
 How to save income tax under section 80C

Avoid last-minute tax-saving traps
March, 11th 2014

Financial planners and advisers give plenty of warnings about the pitfalls of last-minute tax planning. Still, it's a reality of life that there are people who will wait for the last week or two of the financial year to rush into some investments or put money into other avenues that allow them to save some taxes.

We are in that last lap now — the financial year will end in another three weeks. And so, here are some tips, warnings and advises about how you can save some taxes, that is if you haven't done that yet. First, let us take two important pieces of advice/ warning from financial advisers and planners: An individual's efforts to plan out how to save taxes on his/her hard-earned money should start at the beginning of the financial year and not when the year is ending. If one can plan tax-saving options when the fiscal is just starting, he/ she can get the whole year to execute the plan and thus lighten the burden on his/ her finances.

Often, it is seen that an individual has to pay higher taxes during the last three months of the fiscal — that is, January-February-March — which ultimately puts pressure on his/her family's budget, forcing the whole family to shift to a financial austerity mode.

There is another aspect closely related to this last minute financial/tax planning exercise: People are usually in a hurry while in this mode, and that's when they make mistakes in their investments and tax planning . Also, there are agents who sell tax-saving products and take advantage of people's situation. They sell wrong investment or insurance products that may not be appropriate for an individual's risk profile and/or long-term financial goals.

For example, after signing up a well known doctor, a Mumbai-based financial planner found out that the doctor and his wife were paying premiums on over 100 life insurance policies. The life insurance agents sold these policies telling them that every year they have to take new policies to save on taxes while the reality was that paying premiums on existing policies would have served the same purpose. Here, the insurance agents took advantage of the ignorance of the doctor and his wife to sell them policies that were not at all required.

There are plenty of examples like these. "While doing last-minute tax planning, people often end up putting money in products that are not of much use to them later," says Hemant Rustagi, CEO, Wiseinvest Advisors. "The ideal way to plan for saving on taxes is to plan at the start of the year. And if you cannot do it on your own, you can always seek professional help," Rustagi adds.

Still, if you have missed the boat, the best possible way out now is to spend some time to plan it. According to Rustagi, the first step for the same is to answer a few easy questions: How much tax are you supposed to pay? How much tax can you save? How much investment are you supposed to make to save the amount of tax that you can save? Will these investments be aligned with your risk profile and long-term financial goals? Correct answers to these questions can help you avoid most of the pitfalls that come with last-minute tax planning.

On the debt side, one of the best tax-saving options is the public provident fund (PPF), while on the equity side it is the equity-linked savings plans (ELSS) floated by the fund houses, says Rustagi . The case study below by Pankaj Mathpal will give you some idea how financial planners approach last minute tax-saving exercises.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Mission

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions