Income Tax tips: Don't wait for last minute planning, opt for tax-saving schemes now

Income Tax tips: The time to pay your taxes has arrived and most taxpayers would be busy calculating their taxes and claims which can be made during Income Tax Return (ITR) filing. While the government does take taxes from your income and income from other sources, it also gives the benefit to reduce those taxes by filing few forms and claim a certain sum on loans or investments. Every salaried individual has to pay taxes on the salary they receive from their employer. Your employers are bound to deduct taxes on your salary amount. But, it is always advisable not to wait for last minute tax planning, but in fact opt for tax-saving schemes way ahead of time for more benefits. Best period of claiming maximum tax benefit is at the beginning of fiscal year. This is because an early investment will help you earn more gains and also reduce your tax burden.

Kunal Verma, CBO, Co Founder, MoneyTap says, “You should try investing in a tax-saving mutual fund as this will help in reducing your tax burden. Ideally, it would be best if you planned your tax-saving investment on a monthly basis. However, in case you are unable to follow this, you may consider taking a loan is to save taxes.’

But is seeking a loan for investment a good idea? Here are some points that will clear the air for you, as per Verma.

1. Loans are advised only for the purpose of creating an asset, such as buying a house, investing in a business or for higher education.

2. Calculate the amount that you have invested throughout the year and the amount of loan that has to be taken to bridge the gap for investments.

3. Don’t apply for a loan at the last minute. It’s always better to take a loan in advance; so that you can plan the repayment according to your earnings.

4. Try avoiding taking a top loan over the existing personal loan for investment purpose. It will create additional burden and repayment will become difficult.

5. Opt for investment options that come with flexible EMI options. This will reduce the repayment burden as you can repay in EMIs convenient to you.

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Apart from this, Aditya Kumar, Founder &  CEO Qbera.com said, "Invest in a secure instrument that attracts tax benefits. Personal loans as such aren't tax saving instruments. They can be, but it depends on the end use of the loan amount. There are a few government instruments that reward investments of consumers through tax benefits apart from appropriate returns - it'd be ideal to pick such an instrument for your investment. Qbera has attracted traffic of 350,000 for February."

However, if you're investing at the last moment, you can always claim the tax benefits while filing ITR.