Skip to main content

Start planning taxes early to get maximum returns

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

Start planning taxes early to get maximum returns

Last-minute rush to save taxes makes investments prone to mistakes, losses


It's that week of the year when a large number of people rush to put money in a handful of investment products which allow investors to lighten their annual tax burden. This is because every tax saving option for the current financial year would expire on March 31. To take this opportunity of huge aggregate investments from the last-minute tax savers, the sellers of these products, like mutual fund houses, insurance companies, investment intermediaries and agents also push such products. This is a situation that is repeated year after year.


However, as a tax payer who also has investment needs, you should not wait for the last-minute window of opportunity to save taxes. Rather, taxpayers should always make a plan to save taxes at the beginning of the fiscal, that is in April itself, financial planners and advisors say.


There are several advantages of planning to save taxes early in the year. One could start a monthly systematic investment plan (SIP) in an equity-linked savings plan (ELSS) in April itself and continue it through the year. SIP inculcates investment discipline and has the potential to give returns which can beat the inflation over the long term. It also allows the investor to reap the benefits of rupeecost averaging, that is you buy more when the price is
low and less when prices are high, averaging out your cost of acquisition. In comparison, if you invest a lump sum amount, you may not have got the best price to invest in that ELSS.


Another advantage relates to public provident fund (PPF), one of the best tax-efficient fixed income products available in the market. In PPF, if you put money on April 5 or earlier, you get the interest for the full year. But if you put money on any day after April 5, the interest accrues to your PPF account only from the next month, that is from May.


Another phenomenon seen among these last-minute savers is they usually invest to save taxes rather than invest for themselves. For every person who is saving, the primary objective should be investing, and tax savings should be an incentive. Tax saving should not be the primary objective. So naturally, if one starts investing from the beginning of the financial year itself, you would look at the investment angle first, and chances are that tax savings would happen smoothly, through the next 12 months.


There are some disadvantages of starting to save taxes at the last moment. For one, according to Kothari, in case there are some signature mis-matches or a cheque that you gave with the investment-related form bounced, you are unlikely to have a second chance at the last hour and would end up paying higher taxes than ideally you should have.
In their last-moment rush, investors often end up committing several mistakes, some are errors of judgment while some because


of the rush to invest they miss the fine points if investment products they are investing in. In some cases, investors just end up being gullible to distributors and agents who are only out to make money selling products which may not be the best fit for their risk profile.


Common tax-saving instruments

•Equity Linked Savings Scheme

•Public Provident Fund

•National Savings Certificate

•Insurance policies

•Tax-saving fixed deposits
Common mistakes in last-minute investing

•Low-risk investors opting for high-risk investment products

•Buying a new policy each year when paying premium on the old one would suffi ce

•Investing in a low-return policy that gives the agent a fat commission

•Investing in multiple tax-saving products with aggregate amount exceeding the threshold limit

•Buying a market-linked product at a high price just because everyone else was doing the same

•Missing out on investments that offer higher post-tax returns, even if they don't save taxes

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax PlanInvest Online
  2. HDFC TaxSaverInvest Online
  3. DSP BlackRock Tax Saver FundInvest Online
  4. Reliance Tax Saver (ELSS) FundInvest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) FundInvest Online
  7. SBI Magnum Tax Gain Scheme 1993Invest Online
  8. Sundaram Tax SaverInvest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFundsInvest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

Term insurance

Term insurance may not be the most-marketed product by life cos, but it’s a must-have in today’s risk-prone lifestyle WHEN was the last time your insurance agent sold a term plan to you? It’s not a very popular policy among agents, as their commission in absolute terms is low because of the low-premium. Just as agents have their self interests in mind while selling, you need to make your own decision about your insurance needs, which are unique to your family. COST ADVANTAGE A term plan is pure protection. It is the cheapest type of life insurance policy. But what you see might not be what you get, most insurers have a range of health parameters for standard rates. If any of your health parameters — weight, blood pressure for instance fall outside this range, you will pay more. For some companies, the standard range is very narrow. EARLY BIRD GAINS A 30-year-old will pay 15% more premium than a 25-year-old. At 40, the premium is double of what is applicable for a 25-year old, points...
Read more

ICICI Prudential Balanced Fund

 ICICI Prudential Balanced Fund scheme seeks to generate long-term capital appreciation and current income by investing in a portfolio that is investing in equities and related securities as well as fixed income and money market securities. The approximate allocation to equity would be in the range of 60-80 per cent with a minimum of 51 per cent, and the approximate debt allocation is 40-49 per cent, with a minimum of 20 per cent. An impressive show in the last couple of years has propelled this fund from a three-star to a four-star rating. The fund has traditionally featured a high equity allocation, hovering at well over 70 per cent, which is higher than the allocations of the peers. But in the last one year, the allocation has been moderated from 78-79 per cent levels to 66-67 per cent of the portfolio. ICICI Prudential Balanced Fund appears to practise some degree of tactical allocation based on market valuations. Within equities, well over two-thirds of the allocation is parked i...
Read more

Reliance Life Insurance company introduces 17 ULIPs

Reliance Life Insurance company has announced the launch 17 unit linked insurance plans (Ulip). The new range of Ulips encompasses several categories including child plans, pension, protection, savings and investment, which are available in two versions — basic plan with tenure of over 15 years and another with a 10-year-term. According to an official release, these Ulips are primarily targeted at customers paying a premium of over Rs 10,000. All these schemes come with features such as capital guarantee, loyalty additions, higher internal rate of return and several fund options. The plans also offer riders, including payment of lump sum on diagnosis of specified critical illnesses, surgeries and additional life cover. Policyholders have the option of choosing between automatic asset allocation, systematic transfer plan and return shield options. Recently, the company launched two traditional insurance plans — Reliance Jan Samriddhi plan (RJSP) and Reliance Traditional Super InvestAssu...
Read more

TDS Rate and Personal Account Number(PAN)

    The TDS rate doubles to 20% from 10% if you fail to mention your Personal Account Number   IF you run a glance through your pay slip, you will come across something called TDS, which is tax deduction at source. In most cases, the employer deducts this amount at the time of payment of salary itself and pays the total tax amount to the government on behalf of all the employees. If you are a self- employed or practicing professional s, you have to pay this amount yourself.    Tax deducted at source is one of the modes of income tax collection by the government. Under the income-tax laws, income tax at specified rates is required to be deducted while making certain payments.    The rate of deduction of tax at source on interest and rent payment is 10%. For salary payments, the employers deduct income tax at source on a monthly basis after computing income tax liability on estimated annual taxable income of the employee. Tax benefits on housing loan, investments, etc are consid...
Read more

L&T Tax Advantage

Best SIP Funds to Invest Online   The fund follows a growth approach to investing in quality stocks that have a large-cap tilt This large-cap tilted ELSS has fared consistently and fared better than its benchmark by posting a higher margin of outperformance. The fund follows a growth approach to investing in quality stocks that have a large-cap tilt, which is evident in its portfolio. The portfolio is further well diversified across market capitalisation and sectors with over 60 stocks finding a place in it. The upside with this fund is the fact that it has witnessed both down and up cycles of the market to come across as a winner in the long run. Do not doubt the fund based on its size and a few mediocre years of performance, because when analysing its rolling three year returns, the fund's performance stands out to qualify as a must have ELSS in one's portfolio. Stay invested through the lock-in and there are chances of benefiting from returns as well as tax savings will prov...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now