Scrambling to meet the Tax-saving objective for the year around March is a common practice among the salaried. Many often make the mistake of pushing Tax planning until the last moment. Now, we all know the downside of taking hasty decisions. Last minute Tax planning can lead to a mismatch between investment choices and your risk-return profile.
Here are a few reasons why Tax planners should beware of March!
1 You may have to Arrange a Lump Sum Rs.1.5 LAKH
You know that you can save up to Rs.1.5 Lakh by investing in Tax-saving instruments. However, you might not necessarily be able to arrange this amount at the last moment. For the young, not having money to invest at the last minute is just one challenge. The other one is to lose a significant portion of the March salary.
Here’s a February Tip
If you cannot arrange for the necessary funds to save Tax, start investing a small portion of your monthly pay into an Equity-linked Savings Scheme (ELSS)* starting in April.*We at MEGA suggest best ELSS schemes; for more information feel free to Contact: mega@megafina.in
2 You may Not Get Enough Time to Research
You might have heard that ‘haste is waste’. In March, you might not have enough time to research various investment options. In the last-minute rush to save Taxes, you might just invest in the funds you already know about. Thus, you might just miss out on attractive investment options.
Here’s a February Tip
Do your Tax-investment* research now. Study various ELSS funds. Find the ideal investment that suits your risk-return profile.* We at MEGA suggest best Tax-investment scheme to save your tax; for more information feel free to Contact: mega@megafina.in
3 You might Fail to Align it with Other Goals
You might end-up investing just to save Tax. This is like locking-in your hard-earned money without any specific Goal in place. You might fall short of funds to reach your Goals.
Here’s a February Tip
You can align your Tax-saving Goal with your other financial Goals. For example, you can fulfill your world travel Goal just by saving your Taxes for 6 years, with ELSS. Therefore, why settle for one, when you can fulfill two Goals simultaneously.
4 Markets may Not Be Favorable Due to Elections
Financial markets move in cycles. It is a fifty-fifty chance that you may buy at low prices in March. If you are forced to make that Rs.1.5 Lakh investment in March, you may also end up buying when prices peak.
Here’s a February Tip
Rupee cost-averaging through a systematic investment plan is the best way to deal with the market volatility.
Courtesy: Mint Date:-18 February 2019(UTI Swatantra)