Listening to a message tone that says “Salary has been credited to your account” is so soothing. But the same message turns out to be gloomy if it’s about the tax deduction. As a responsible citizen of a country, you should abide by the rule and apply for the tax return and contribute to the growth of the country.
The government never asks its citizens to pay the return keeping everything at stake. And to prove it right, the government has defined the bracket and the citizens have to pay accordingly. No low-income person is forced to pay the amount that he cannot afford.
Government seeks help from its citizens directly or indirectly, so you should be wise and do tax planning in such a way that it is beneficial for you as well for the government. If you are not so aware of the technicalities, we recommend hiring one of the best personal tax planning accountants in Finchley. They will help plan things out and complete the process of the tax return.
While working with an accountant, you should consider the points.
Investment for tax saving is not a great idea
A large population of salaried people thinks the investment is the best way to save on taxes. It’s just a way but not a definite rule. You should change the perspective of investment so that it can be tax saving as well as a mode for wealth creation. In other words, you should invest in earnings in the future.
The ideal way to do investment and tax planning is to invest in Equity Linked Saving Scheme instead of investing in equity.
Insurance is not a feasible choice
If you pull out the financial portfolios of the salaried people, you will find insurance as a common product in all. There is no doubt that insurance helps in tax saving but you should not be narrow-minded. Being an insurance holder just to save on taxes is not good for your future. You should take insurance for its primary purposes i.e. to insure life and medical risk.
If you need an insurance policy, then understand its real benefits in your financial life before investing. If tax benefits are an add-on, then it’s a bonus point for you.
Tax saving FD is an ideal choice
Before taking any step in your tax financial planning, discuss with your family members along with a personal tax planning accountant. According to them, a tax-saving FD is a viable option. It is one best tax-saving choices with a guarantee and tax benefit. Also, the risk is less.
You should search for a tax-saving FD that would match your financial objective and invest without any doubt. The only thing is you should understand the terms and conditions of the policy before investing.
Other than the points discussed above, the one common mistake to avoid in tax saving and investment style is copying someone as it is. You need to understand that the financial needs and goals of every person are different. The steps taken by your friend in tax planning cannot be a viable choice for you and vice versa. So understand your financial objective first and invest accordingly. ‘