For a big chunk of the populace earning a monthly income, tax planning is usually an activity that is pushed to the back burner until the tax season kicks in. But when you near the end of the financial year, there would be so little time and so many options that you may not take the right investment decisions in haste.
The most recommended strategy would be to start investing during the first quarter of the financial year. This way, you will have enough time to plan your investments and get maximum tax savings.
What to look out for when investing
When you invest in a financial instrument that yields returns, one of the most important factors to consider is whether the income earned is taxable. In case this is so, a portion of the money you make over a period of time will be deducted as tax, hence eating into your returns. Consider a scenario in which you have invested in an instrument like National Savings Certificate (NSC). When you receive the interest from the investment, this…