5 Reasons To Avoid Last Minute Tax Planning

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We have often heard from tax planners who keep repeating that we should plan our taxes well in advance so that we can avail maximum benefits.

There are agents who tend to take benefit of sell tax-saving products and take advantage of people's situation and push you to make commitments which are not suitable for you.

5 Reasons To Avoid Last Minute Tax Planning

Click to know more on 5 top tax saving instrument for 2015.

Here are a few points you should consider.

1)You may tend to overlook your goals

Due to a delay in tax planning we tend to overlook some avenues which may impact our returns and at times dampen our financial goal. Click to more on points to note before planning your taxes.

2) You'll receive a refund sooner and faster

The sooner you file your taxes, you will receive your refund early. One can make use of the refund money by investing the same again. Electronic filing works best if you expect a tax refund.

3) More time for Documentation

For many people the biggest challenge is getting all of the documentation together. If you plan your tax in advance one can take their own time for documentation and set the right documents ready.

  • Prepare a tax checklist to help you gather all the tax documents
  • Keep all the information that comes in the mail in January
  • Do not to throw out any tax-related documents, even if they seem unnecessary.
  • Gather all the receipts which you have piled up during the year.
  • Make a group of similar documents together, place them in different file under different headings.

4) Financial Planning

By giving yourself more time you can consider all products including the ones under Sec 80C which are exempt from tax. When investing late, people fail to choose the right investment or insurance products that may be appropriate for an individual's risk profile.

To choose right product one question must as the question: How much investment are you supposed to make to save the amount of tax that you can save? Does investment made match your risk profile and long-term commitments?

5) Tax Knowledge

Do not overdo your taxes, and make it complicated. If you are planning your taxes you should be aware of tax applicability on each product. After Every Union Budget set of rules, benefits and eligibility tend to change so be updated with financial products and its tax applicability to make right decisions.

If you hurry you may forget about the latest update and make a wrong financial decision elements are taxable when one makes a tax saving investment.


Read more about: tax planning, income tax
Story first published: Monday, January 19, 2015, 13:16 [IST]
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