Santa Claus was always everyone’s favourite character. Gifts! Receiving and giving them is one of the best things about the festive season. But if you are prone to procrastination, buying gifts can seem like a real chore. So, when Christmas does loom large, the panic levels start to rise. The worst part is that all the good gifts seem to be taken by then. As a result, you have to rummage through the scraps and pick up whatever is left. Same is the case with annual tax season. You are left with scraps if you don’t plan for the tax season early on. A last-minute dash can backfire as all the ‘good gifts’ are off the shelf.
And your Santa can certainly help you in these following ways:
Santa always comes during mid-night so that he is never late. He makes sure that everybody receives their gifts early morning. Similarly, everyone knows that it is important to start the tax planning process well in advance. But the real test is to actually get started. But, this could be easier if you knew the numerous benefits of early tax planning. For one, it is possible to pay less tax. By planning ahead, you become aware of the numerous options available in front of you.
An eleventh-hour decision to get an investment for tax-saving purposes may not be ideal. It may not help you meet your long-term financial goals. Therefore, you need to take time out to do some research first then you can decide on an investment option that suits your financial need. Having time on your hand can help you do this. Else, you end up making rash financial decisions.
Santa always gives the desired gifts to every child and for that, he must have made a long-term plan. He has to read every child’s letter and provide presents accordingly because if he gifts in a hassle than nobody will be happy getting the gifts they don’t want. In a similar way, tax planning requires a long-term view. There are a lot of investment vehicles out there that can help you save taxes. Also, you shouldn’t simply invest in a particular avenue to reap tax benefits. This could be a quick fix but it could come back to haunt you in the long run. Instead, it is ideal to identify your long-term investment goals. And based on this, you can invest in tax-saving avenues that help you reach your financial goals. Some of the investment options that offer tax deductions are ULIPs, endowment plans and Public Provident Fund (PPF).
As the festivities near, remember to be your own Santa and do your tax planning early. And as a gift to yourself, try and start your tax planning right away. The more time you have, the better it is!