4 Valuable Tax Planning Tips You Must Know

As a responsible citizen of India, you must pay Income tax every year. But as a smart taxpayer, you are free to look for ways that can help you reduce your tax load and save money in the long run. All of this is possible with appropriate financial tax planning. An expert consultant is the best person to help you in this case. But, this blog briefly articulates the concept to help you make informed decisions. Let us start things off with the basics.

Tax Planning: What is it?

Tax planning is the lawful and strategic management of financial responsibility. It is done in a way that minimizes a person's tax obligations. The entire process utilizes legal deductions and provisions made by the authorities to limit the burden within boundaries. 

Tax planning helps businesses and individuals maximize profits by reducing tax burdens. The strategizing part of the process involves discussions on expenditures, investments, business structure, and other relevant data. 

Some Helpful Tax Planning Tips 

  • Estimate taxable income

Estimating the yearly income beforehand will give you an idea of the amount you must bear as tax. This will also help you determine ways to reduce tax obligations. 

  • Plan expenses and investments

After forecasting your yearly income, you can plan your expenses and investments to save tax accordingly. You can include some tax optimization instruments or policies in your plan. They can be as follows:

  • National saving certificate
  • Premium paid for life insurance policy
  • Public provident fund
  • National pension scheme
  • Principal amount for home loan
  • Equity-linked savings scheme
  • Children's tuition fees
  • Sukanya Samariddhi Yojana account
  • FD for five years
  • Keep all your tax-related documents in one place

It is common for people to invest in things that can help them claim tax deductions later. However, keeping all those receipts and bills in one place is also important. All these papers will act as proof before your tax obligations are officially decreased.

  • File your income tax return in advance

It is best to file your ITR well in advance to avoid any legal notices or scrutiny from the department. When filed on time, there is are high chance you may receive your TDS return shortly.

Conclusion

Filing an ITR is no big deal. But what's more important is the financial and tax planning behind that. If you feel overwhelmed when doing so, get in touch with a professional consultant at Neuron Wealth.



Note: Investment in securities market are subject to market risks. Read all the related documents carefully before investing.


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