Momeys.. Bet your lists are going berserk with holiday season approaching. For a lot of us, travel would be on cards. A flurry of hosting to playing guests at weddings & parties will take up time. Add to that the pressure of turning out your best – a few salon visits & shopping trips – there goes any possible free time out of the window. But no one’s complaining. After all December is a time we all love waiting for.
Now having looked at literally the brighter side 😊, this post is to remind about the money that shouldn’t fall prey to taxes. We have seen from very close quarters, fellow momeys have heavily procrastinated, only to loose money to tax.
November-December can be busy time but it shouldn’t come at the cost of tax planning. For those in mid to high tax brackets, this is a great time to take stock. Here are simple steps to approach tax planning:
1. Calculate your year’s taxable income. For eg. If you have rental or interest income in addition, add it to your salary.
2. Determine your tax bracket
3. Check if you have any deductible investments like Home loan payments, life insurance, PF contribution, PPF etc. Under 80C, you can get tax deduction upto 1.5 lacs.
4. Check for any shortfall in the deduction limit of 1.5lacs. If the tax free investments are not totalling to 1.5 lacs, you need a tax plan.
5. Revisit your financial goals. If your money requirement will be soon, you will have to look at lesser tenure options.
6. You believe in No risk – No gain? Momeys if you want utmost safety of your capital, choose safe fixed income options like PPF or FD. If minor volatility doesn’t bother you, you can take some risks with market linked options like NSC, ELSS.
7. If youYou want higher returns, then zero down on NSC or ELSS. (ELSS would be our choice)
8. Save your investment proofs in a folder. While filing taxes, you will need the proofs handy so ensure you keep them easily locatable.
9. Invest because today is the best day. The sooner you finish tax planning and have your choices ready, go ahead and make a purchase. Often delay in investing leaves you in lurch when employer’s HR asks for proofs. For lack of proof, they deduct tax from salaries. You could totally avoid such rude shocks.
In the end, all we can say that is every money cautious person is taking stock of their tax liabilities ahead of the spending season . Are you too momey?