Planning early will help you review your tax plan multiple times and make alterations if you are unsure about any decision.
As the financial year nears its end in March, you may see people scramble with documents to make last-minute attempts to claim deductions on their taxes. However, this often results in poor and uninformed decisions. It is thus wise to plan early to bag the best available options and claim the maximum possible deductions.
Here are a few tips on how to start planning for taxes now. Have a look:
Organise Slips And Other Relevant Documents
Tax deductions are entertained only when you make claims with authentic slips and supporting documents. Therefore, it is important to keep all your relevant documents handy and well organised to avoid last minute confusion. It is a good habit to maintain separate files for medical bills, educational fee receipts, and similar papers.
Prepare a List Of Deductions You Wish To Opt For
The Income Tax Act provides a long list of items for which you can claim tax deductions. An effective tax planning starts with choosing the most rewarding categories of deductions. However, this may be a time-consuming thing for the ones with lesser experience. This is the appropriate time for you to start deciding the areas where you can claim deductions in the coming days. Keep all the supporting documents handy for the areas you have chosen to claim deductions.
Hiring Tax Professional For Help
If you are planning to hire a tax professional to get assistance in filing the returns, this is the right time to do so. Deciding early will give you time to take reference from your known ones and read reviews about the work and efficiency of the tax professional you wish to hire. Hiring early will also give you time to review the work and ensure there are no errors.
Keep Your Ears Open But Don’t Follow Others Blindly
We meet plenty of people with different opinions, lifestyles, goals, and ways to look at life. It is wise to keep your eyes and ears open to observe and listen to what other people have to say. However, following anyone blindly might land you in trouble.
Thus, it is time you can start listening to what people are saying and proceed with your tax planning only after doing a good amount of research. Financial decisions should always be taken considering your short and long-term financial goals, expectations, liabilities, and risk-taking abilities. Your decisions should not be similar to the people around you.
Start Investments And Savings Now
Investments and savings play a major role in your finances and hence it is important that such decisions are not taken in hurry. If you are planning to buy a policy or invest your money somewhere, doing it early will help you read and understand the policy related documents in and out.
Meanwhile, rather than hiring an agent, you can yourself approach different policy providers and choose what appears to be best for you. With the increasing competition, financial institutions are coming up with new and tempting offers each day. Understanding what lies beneath the ambiguous clauses need a little bit of time and attention.
Many a time we tend to postpone things until the deadline arrives. In the midst of all the day to day activities and professional as well as personal responsibilities, you may not get enough time to start planning taxes. However, it is time to keep aside all your excuses and start planning your taxes right now.