Avoid These Tax Saving Mistakes And Stay Tension Free

So it’s that time of the year again when salaried people go into a frenzy thinking about how to file tax returns. It can seem like the most boring job ever but it is actually a saviour for those of us who do not give much thought to our savings in the entire year. While going through latest news of discounts, deals for eating out and other mindless things may have turned you into a monster spender, you need to start focussing now or be ready to donate a chunk of your money to the government. Worse still, be ready to have no backup money when you need it the most. What’s more, maybe you are well-versed with all your tax savings schemes but adopting the wrong strategy can mean that you got the job done wrong. So have a look at these common tax saving mistakes and how you can avoid them to become rich beyond your means.

Doing Last-Moment Tax-Saving Investments

Are you one of those people who suddenly get a mail or message about filing tax returns and start looking at how to save money to avoid paying taxes? Then you are making this grave mistake. It hurts your savings portfolio as you have no prior or proper planning and end up choosing any scheme that looks lucrative to you at that time.

Using Up Crisis Funds

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Using the money kept for emergencies or some other purpose for tax saving schemes is something that you should never do. A crisis can arise any time and it just implies that you are ill-prepared for this.

Paying No Attention To Tax-Exempt Expenses

Do you start thinking about what all to mention in your tax declaration form? Aside from the broader categories, people often forget that the premiums they are paying towards their health insurance, house rent, house loan payment, tuition fees of kids or interest on educational loans, medical expenses, donations to charity can also be included in it.

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Keeping All Eggs In The Same Basket

We all have backups of data, our precious items and what not? But when it comes to savings, we don’t pay much attention and end up pooling all our money into a fixed deposit lump sum which gets locked up for several years. While it hurts your liquidity, you also end up with your hands tied in case some special savings scheme comes up with better returns.

Getting Scared Of Equity Investment

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Most of us end up saying no to investing in stock market to save tax. Or investing in equity altogether because we are scared of market volatility. True that markets can be volatile in short term but avoiding equity investment for long term can be a very pricey mistake.

So be prepared to prepare a better strategy not only for tax savings but also save your hard-earned money in the right way by avoiding these common mistakes. Want to know how to save money each month, best apps to save money or want to start savings from Rs 10? Then keep reading Her Zindagi.

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