Usually this time around the year, taxpayers start exploring various tax-saving options to avail a deduction under “Section 80C” of the Income Tax Act, 1961. However, the last-minute rush often results in investors choosing tax-saving investment options that may be confusing or not best suited for them. And end up investing without properly considering the pros and cons.

Benjamin Franklin once said “In this world nothing is certain expect death & taxes.” In today’s world these golden words cannot be truer, as taxes play a very important role in the investment journey of any person.

Taxes consume a major part of our earnings, higher the earing higher tax you will pay. There are various legitimate ways offered by the tax authorities of reducing your tax liability by utilizing various available exemptions, deduction & benefits. These offerings must be planned well not only to save tax but also to meet your investment objectives. So it is important to consider tax planning as an important part of your Financial Planning. Income Tax Act, 1961, offers several exemptions & deductions. The most popular amongst the tax payers in section 80C such as Insurance Premiums, PPF, NPS, ELSS etc.

See the below table for various options to invest under Section 80C:

Note: Interest rates on government savings schemes are announced every quarter.
Premature withdrawals have certain restrictions.
ELSS & NPS are market linked and hence returns may vary

To conclude, it is a best thing to plan your tax saving investments at the beginning of the year than to rush at the end hour. This gives you a benefit not only to save tax but also helps you get a step closer to your goal achievement.

Make tax-saving a holistic exercise by complementing it with your investment planning. And do not limit it to only deductions under Section 80C. It important is to understand if the product suits & matches your goal and risk appetite. If not then avoid it completely. Self-risk assessment is very important before you make an investment in any type of product.

As per governments new tax regime, understand what is more beneficial for you old tax regime or new tax regime and invest accordingly.

To know more about old and new tax regime read the article

Happy Tax Planning & Investing!

About Us: Malpani Investments specializes in Investment Advisory and Planning. Our Mission is to provide financial freedom to our clients by understanding their financial goals and helping them plan, save, invest and be disciplined, so that they can stop worrying about money and lead a happy and healthy life.  We help them understand personal finance in order to eliminate the gap between where they are now financially and where they want to be. Helping them with a suitable investment decisions so that they can give more time to their family, health and life aspirations. 
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