Your tax-saving action plan

For those who haven't yet made their tax-saving investments, the deadline extension to 30th June would have come as a welcome surprise amidst the otherwise gloomy scenario we find ourselves in now. This special report is just for you and will guide you in making the right tax-saving decisions. Ideally, the right time to start making your tax-saving investments is not at the end of the financial year but at the start of it. When you begin early, you have more time to pick the best investments, while rushing often lands you with bad investments. But unfortunately, many of us see tax-planning as a year-end activity. Worse, some of us altogether fail to make any tax-saving investments due to outright 'busyness'. Many investors are drawn to tax-saving investments due to the tax they can save. But that's just half the game. You cannot overlook the product in which you are making the investment. If you select a wrong product, though you will save tax, your overall outcome could be sub-optimal. Your tax-saving investments can play a major role in your financial plan. They can be instrumental in wealth creation and protection. It is indeed worthwhile to pay attention to them. Calculating income tax For most of us, it is the accountant at our office who tells us how much we need to invest to save income tax. If you want to know your taxable income, you need to first take a sum of your income from all sources. Many of us have just one source of income - salary. But others may have multiple sources like income from property or business or capital gains, etc. Overall, there are five such categories: Salary House property Profits and gains from business or profession Capital gains Sources other than the four sources mentioned above, such as interest income from bank deposits, income from lottery, etc. Once you have combined income from all sources, you arrive at y

This article was originally published on April 22, 2020.