You must have your financial goal in mind first and then see how you can meet your goals and in the process take advantage of tax savings strategies, writes KARTIK JHAVERI.
Most of what we do with respect to tax saving / planning/ investment whichever way you call it is going to be of little or no use in years to come. The returns from such investments are likely to be minuscule and / or they may not serve any worthwhile use of your money. Tax planning is very strategic in nature and not like the last minute fire fighting most do each year. For most people tax planning is akin to some kind of a burden that they want off their shoulders as soon as possible. As a result whatever seems ok and will help save tax – lets go for it is the basic mantra. What is really foolhardy is that saving tax is a larger prerogative than that of utilisation of your hard earned money and the future of such monies in years to come.
Like each year we may continue to do what we do or give ourselves a choice this year round. Let’s think before we put down our investment declarations this time around. Like each year product manufacturers will be on a high note enticing you to buy their products and save tax. As usual the market will be flooded by agents and brokers having solutions for you. Here is a little guideline to help you wade through the various options and ensure the following;
Strategic Tax Planning
So far with whatever you have done in the past it is important to understand the future implications of your tax saving strategy. You cannot do much about the statutory commitments and contribution like PF but all the rest is in your control.
That said ideally you must have your financial goal in mind first and then see how you can meet your goals and in the process take advantage of tax savings strategies.
There is so much to be done while you plan your tax. Look at 80C benefits as a composite tool – look at this as a tax management tool for the family and not just yourself. You have section 80C benefit for yourself, your spouse’s 80C, 80C for your HUF, parents 80C and 80C of father’s HUF. There are so many options for the Rs. 1.5 lac to be planned and hence so much to benefit to be reaped from good tax planning.
(The writer is a Certified Financial Planner and may be reached at kartikjhaveri@transcendindia.com)
