Planning ahead is very important to avoid last minute hassles and save tax, however some common mistakes can hamper the process of effective tax planning.
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Tax Saving Plan: If you are planning to save tax, then you need to avoid some mistakes, due to which you may have to face many problems. Because during the last phase of the financial year 2022-23 planning for tax savings Management is an essential aspect of Finance Management. Planning ahead is very important to avoid last minute hassles and save tax, however some common mistakes can hamper the process of effective tax planning.
Some such people make a mistake and invest without knowing the current expenses. It is important to make a proper plan before investing to get the exemption of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. If you don’t do this, you may have to face financial problems later.
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Tax exemption will not be available in this situation
It has also been clarified in Budget 2023 that tax exemption will not be available for investing in an insurance policy with a premium of more than Rs 5 lakh annually. Therefore, individuals investing for tax exemption should ensure that they invest in a policy with a premium of less than Rs 5 lakh. Using credit card for tax exemption is a common mistake that individuals often make. It is important to avoid this as it can increase your debt, which can be difficult to manage in future.
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Beware of tax planning mistakes
Lastly, to avoid financial pressure, it is also advised to avoid doing tax planning in the last month of the financial year. This will allow individuals to plan effectively and save tax without any tension. Individuals should keep these common tax planning mistakes in mind and avoid them to ensure effective tax planning and a stress-free financial year. So that there is no problem in future.