Investing is the best practice to save your money. But should investing be done just for this sole purpose? While filing an ITR, we realize the investment mistakes that we made and start planning out towards new investment goals and strategize accordingly to get benefitted in the next tax season. When it comes to your goal setting, tax planning should go hand in hand along with it.

Maximize your returns while saving taxes

The first step towards tax planning is – Goal setting. You might have multiple goals set in your mind, let’s say currently your goal is to purchase a car. You should know the right time to purchase a car and in return it will be beneficial for you to claim the tax deduction accordingly, keeping in mind the depreciation value. In case if you are planning to get a housing loan, make sure to be well-learned about the relevant tax provisions. Take advantage of the tax deductions, exemptions and exclusions wherever possible; while choosing the right instrument for investing, to meet your desired goals and also for saving taxes.

Invest in an asset that helps you save taxes 

Your primary goal should be to maximize your returns and secondary goal should be to cut down your cost. Make sure to make most of these two goals by investing in avenues, which fall under Section 80C and 80CCD – PPF, ELSS, ULIP and so on. Thus, while filing an ITR, your investments in these instruments can benefit you in tax deductions.

Let your situation dominate your needs

Tax Planning and investing for tax benefits should not be the only practice that you should follow, it should be in line with your goals. If you are planning to build a strong portfolio, it should be driven by your age factor. The younger you are, it is more likely for you to invest your money into instruments with high risk. As you age, you should start investing your funds into debt instruments. This will ensure that your portfolio is not driven by any external factor, you are free set out your own benchmark.

As Warren Buffett rightly said, ‘Price is what you pay. Value is what you get.’ The money lost today could have been worth a huge amount in the future. Try not to lose your money as long as you can, may that be while making investment decisions or while saving taxes. Every single penny matters when there are goals attached to your financial planning. Keep investing!