Three tax saving decisions to make now

Equity investments make an important part of a portfolio. An investment should never be done at one go.

Dec 31, 2014 11:12 IST India Infoline News Service

There are just few months left for the financial year to end and it is the right time for the people to focus on tax saving instruments. Evaluating the available options at this time will make the tax saving process easier and rewarding. 
 
Equity investments
 
Equity investments make an important part of a portfolio. An investment should never be done at one go. It should be a spread out investment so that the investor doesn’t get stuck in the market. The investors can always select investment tool like Equity Linked Savings Scheme to enter the market. Here again and again the focus is shifted on the word 'time'. So, understand the significance and start investing in equity markets now.
 
Tax benefits in terms of deduction
 
There are two types of tax benefits that a person can get when they make a tax saving decision. The first benefit is received at the time of investment. An individual gets the deduction when he invests money in a tax saving instruments. However, the investment should be done in those instruments that are covered under Section 80C like PPF, EPF, Savings Certificates, Insurance premium and others.
 
Tax benefits in terms of returns
 
The second type of tax benefit is received when an individual generates incomes from the investment falling under beneficial tax treatment. This income can either be completely tax-free, or a part of it can be tax-free. There are other specific investments tools introduced time to time that even have a lower tax rate compared to popular tax saving instruments. The whole purpose of this discussion is that it is the right time to consider the various options, so that selected choice meets the individual’s needs. Moreover, making a choice at this time will result in a lesser amount of financial pressure on the investor. 

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