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Mutual fund investment has a variety of schemes, and multiple options for investors to invest, investing of investors is also not restricted to only one kind of scheme, rather they can invest more than one fund of their choice. It is also a fact that every fund is not suitable for every investor, they have different needs, like some invest for their long-term goals, some invest for their short-term goal, whereas some invest to save tax on their return, and many.
Well, it is always advisable to investors, that their choice of investment product should always be aligned with their investment goal, risk profile, and investment tenure.
People may have different financial goals like child education, retirement (long-term goals) or taking their family on a trip, buying a car (short-term goals) and more, but at the same time, one thing that is common to every investor is tax planning. Every investor is confused about how to plan their investment that works for long-term wealth creation along with that, also avails the option to save tax.
Well, do you know you can combine the two and achieve your goals while saving tax? Let our know-how.
What Is Tax-Planning?
People consider filing and paying their tax on time is tax-planning but there is something more in this arena. Tax-planning is about trying to minimize your taxable income by taking the advantage of deductions, exemptions, and exclusions, offered by Indian Law, with the motive to avail tax-saving options.
Why Tax-Planning Is Necessary?
Almost every people in this world, want to pay tax as low as they can, no one wishes to pay more tax, and thus tax-planning is necessary. Tax-planning is an effective way to manage the income that helps you reduce your taxable income by allowing you to make investments that can be claimed for deductions and exemptions.
Goal Setting Is the First Step Towards Planning
Goal Setting is the most crucial step, for your future planning, where you first identify your goal, then calculate its expense, and then you invest at the right place, in the right fund to build a corpus for your goal. Every goal is achievable when planned and executed properly, from your side your goal setting plan, calls for great determination and patience.
You must remember, nothing can be achieved overnight, but with patience and determination, it can be.
Goal Setting Will Help You Prioritize
Goal setting is important as it helps you prioritize your goals based on funds availability and duration. This process lets you understand your current financial situation and gives you a better perspective to achieve your goals. Goal setting doesn’t end at financial planning, rather it needs a proper execution strategy, to reach your goals.
Investment review is also important as it a part of goal setting, and essential because it lets your investment grow without any hurdle in their way.
Basically, goal setting will help you in planning where to invest, how much to invest and how long to invest.
Align Your Goals, Such That Your Tax Planning Is Covered
Choosing one between, goal setting and tax-planning are a bit difficult as both the options are the call of your financial planning, so basically in this situation, it will be best if we align our tax-planning such a way that it works to achieve for our goals. While there are a lot of investment options to save tax, picking the right one is the key.
Conclusion
Investing in ELSS funds can be considered as the best option here, as they earn higher returns compared to any other tax-saving plans. This extra return will help you achieve your long-term goals easily and tax-saving features would help you to save taxes on your taxable income.
End of the day all of us want to achieve our goals and retire peacefully. Therefore, be it any investment always link it to a goal and realize your goals with disciplined investing.
Most importantly, do meet a financial advisor, they will help you to plan your investment well according to your goals, and will also plan for your tax-saving.
You can also contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).