Align tax-saving investments with long-term financial goals

Avoid products that combine low returns with inadequate insurance

- HIMAI PATEL

With about four months left in the financial year, it's time for investors in the old tax regime to prioritize tax-saving investments. A survey done in July by Finnovate, a financial fitness platform, found that 27 percent of respondents had not done any tax planning. Delaying tax planning until the last moment can result in rushed decisions and missed opportunities.

Start early

Starting early ensures a smoother and more strategic approach. "If you have not begun tax-saving investments, you are already late. But it is still better to act now rather than delay it further," says Arvind Rao, founder, Arvind Rao & Associates.

Having time allows taxpayers to take a considered decision regarding which tax regime to follow—new or old. "Only in the old tax regime do you get tax deductions on investments," says Sujit Bangar, founder, TaxBuddy.

The new regime is likely to be beneficial for most people with an annual income below ₹10 lakh. "Only if you expect total deductions to exceed ₹3.5 lakh does it make sense to stick to the old regime," says Rao.

Early planning allows for thorough evaluation of tax-saving instruments. "Taxpayers can utilize the full range of deductions under sections 80C and 80D," says Mohit Gang, co-founder and chief executive officer, Moneyfront. They can also avail of deductions under Section 80E on education loans.