Tax planning: Don’t follow the herd
Divya Prasad is worried. Reason — the accounts department of her office has told her to furnish proof of investments planned by her during the year to lessen the tax outgo, something that she is clueless about. And she does what most of us do in a situation like this — call up an agent, pay up a certain fee and asking him for advice.
This is that time of the year when individual taxpayers start scrambling to plan out tax saving options. While the employer is under obligation to consider all investment proofs provided by an employee to tabulate the tax outgo, if the employee misses out on any detail or proof, he or she can always claim the investments in the Income-tax Return filed for the year and claim refund, since the employer has already deducted the extra tax on the investment portion for which the employee had not provided proof.
Tax experts say that most people do not have any idea on where to park money for saving taxes and most of the time simply rush in to invest in the same tax-saving instruments as their peers. Neither does it help them in proper saving on tax outgo nor does it lead to prudent tax planning.
There are a few crucial points one must keep in mind while working out the maths of saving tax. According to Vineet Aggarwal, director, KPMG, the first concern should the need for liquidity. Taxpayers must bear in mind the period when they
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