Tuesday, March 20, 2012

Last minute tax planning done is like gulping a hot cup of coffee in one go

Authored by: Ajit Panicker Nowdays, the clients who belong to the salaried class try to complete their tax planning much on time and even file teir taxes on time. Many believe that they are abreast with the required information about tax planning. But i doubt is that much sufficeint. After having serviced so many clients in my professional life till now what i have largely observed is that, 90% of the employees of even large firms do feel that the last minute tax planning which they do so as to furnish the proofs for the tax declaration done in the beginning of the year is what is tax planning, and this tax planning they assume to be their investment planning.

This article is seriously dedicated to all the salaried employees who file taxes and hence purchase the products which come their way at the last moment.

when you declare the investments in the begiining of the year, almost all the employees try to declare the limits under various sections of the income tax, so as to avail the maximum tax advantage. They do so, so that the tax is not deducted monthly, and once they declare the same at the end of the year with proofs the tax deducted would not be a burden,

But what people do not realise is that, at the fag end of january or february when almost all the corporates ask for the investment proofs , many do not have all the proofs. Because the products which give you tax rebate have not been prrchased.

Then comes the herd of the insurance advisors, mutual fund advisors and whover approaches them or they get hold of someone, the product for tax planning is purchased, without realising that it may not fulfill their financial objectives.

The lesson to be taken here: please plan during the complete year, contact a professional financial planner who plans your cash flows, calculates your net worth, plans your protection, evaluates your existing investments , evaluates your exitsing health cover etc and then designs the plan according to the objective decided together by you and the planner

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