Few more days to go when the current financial year would end. Sensex is depressed right now. For those who do not follow investment discipline of SIP it's right time to consider investing in ELSS Funds to save tax under section 80C. It would go a long way if one can look at his tax planning as an opportunity of investing.
Prioritise Tax Planning
Tax planning is more than Section 80C. It is more than fixed income instruments such as the Public Provident Fund, or PPF, and the National Savings Certificate, or NSC.
Good tax management can go a long way toward enhancing your return. But, the decision needs to be made in conjunction with your overall portfolio and not in an ad-hoc fashion. For instance, if you have no equity exposure in your portfolio, you should consider an equity linked savings scheme, or ELSS, which is an equity mutual fund that offers benefits under Section 80C. Most investors, in a crazy dash to meet their Section 80C requirement, will opt for unit linked insurance plans, or ULIPs, and endowment plans and often end up with a portfolio heavy with insurance products that do not suit their need.
Most individuals rarely think about tax planning from an investment point of view. Hence one finds that they do not approach an investment with a perspective of whether or not it fits in with their overall portfolio. The approach is often just grabbing up investments that will give them the tax break, irrespective of whether or not it will help them reach their determined financial goals or fit into an overall investment strategy.
Tax planning investments are no different from conventional investments. Hence, it is imperative to obtain an in-depth understanding of all investment avenues available which offer tax benefits and choose suitable ones that will help save tax and achieve goals.
It's right time NOW.
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