ITR Filing: If you have not done tax planning for the current financial year yet, then you must be doing so at the last minute. There is also a possibility of mistakes in tax planning at the last moment. Let us know about some such mistakes, which should be avoided.
ITR Filing: The last date for filing Income Tax Return is approaching. The last date for ITR filing is 31 July 2022. After the end of the last date, you will also have to pay a fine and can also get a notice. Therefore, by filling the ITR immediately, settle this work.
If you have not done tax planning for the current financial year yet, then you must be doing so at the last moment. Although tax planning is a year-long activity, many people become aware of it only when the financial year comes to an end. This strategy is wrong as there is also a possibility of mistakes in tax planning at the last minute. Let us know about some such mistakes, which should be avoided.
Make a list of tax liabilities
Before doing tax planning, it is important to know what your tax liability is. To know about the tax liabilities, first of all it is important to know about your total income and your tax slab. There are many sources of income – salary, business, interest on deposits, capital gains on selling stocks or mutual funds, gifts etc. However, not every income is taxable.
Investment return
Always be updated about the annual rate of return of your tax saving option. Be sure to match it with publicly available information about that option. Knowing about the returns, you will know how helpful it is to save tax by investing in it. Is this option beneficial or not, or there is a need to shift to some other option.
Life insurance
There are many ways to save tax and these include insurance. However, buying a policy just for tax saving purpose can result in not getting enough life cover and not getting acceptable investment returns. Therefore, before buying life insurance, try to find out the coverage according to the need of your family.
Focus only on saving tax is harmful
When doing tax planning, focusing only on tax saving and ignoring investments will block your corpus. Financial goals, wealth creation, availability of liquidity to meet emergency situations and adequate health and life insurance are essential along with a good tax saving plan. Also, remember not to sign any investment form without reading the terms and conditions, risk, lock-in period and investment cost.
