Income Tax Planning Exercise Too
Tax Saving Vs Tax Planning..
“All men make mistakes.But only wise men learn from their mistakes.”- Sir Winston Churchill.
The above proverb is very much relevant to our daily lives - be it handling finances or / even in any other facets of life.
Moreover the leading author Mr. John C. Maxwell has also quoted “A man / woman must be big enough to admit his / her mistakes, smart enough to profit from them, and strong enough to correct them.”
But again this is conveniently forgotten by most, which often leads to failure to learn from mistakes, the arrogance to admit it and which thus leads you to repeat the same mistakes again.
While undertaking your income tax planning exercise too, you tend to repeat the same mistake of waiting till the eleventh hour and are arrogant enough to admit it.
As the financial year draws to a close, we all start feeling the heat and realise that yes, now we have to invest in order to save income tax. But have you ever wondered whether it is the prudent way for tax planning?
Remember, waiting till the eleventh hour to undertake your income tax planning exercise will often drive it towards mere “tax saving” rather than “tax planning”; which in our opinion is a sub-optimal way to undertake a tax planning exercise.
Unlike “tax saving” which is generally done through investments in tax saving instruments / products, under “tax planning” we take into consideration one’s larger financial plan after accounting for one’s age, financial goals, ability to take risk and investment horizon (including nearness to financial goals).
And by adapting to such a method of “tax planning”, you not only ensure long term wealth creation but also protection of capital.
Advance Planning..!
Hence, please remember to commence your “tax planning” exercise well in advance by complementing it with your overall investment planning exercise.
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