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Making the most of your tax-saving investments

DOWNLOAD PDF A famous scientist, who was crowned as the ‘Person of the Century’ by the Times magazine, once said, “The hardest thing in the world to understand is the income tax.” There is no denying that income tax is something most of us love to hate. And that’s not just because of the tax outgo. What we actually despise is the complexity of it. Due to this, many of us fail to make optimum tax-saving choices. This hurts our financial outcomes in the long run. In reality, you don’t have to worry about how complex the Indian tax code is. As an investor, your choices are welldefined. The cover story in this issue will introduce the various tax-saving options to you, along with tax-saving equity funds. You can compare the various choices and pick the one most suitable for you and that’s that. The real challenge in the taxsaving process is not its complexity but our own mindset. How we see tax-saving impacts our outcomes from it. How best to approach tax-saving then? The answer is don’t aim for that. Don’t worry about saving the tax; worry about accumulating a corpus for a long-term goal and see tax-saving as a by-product of that process. For instance, if you want to accumulate a certain corpus for your retirement, you can do SIPs in a good tax-saving equity fund. This way you won’t just save income tax but also build wealth. SIPs ensure that you invest consistently and in a disciplined manner, which is a remedy for our forgetfulness and indolence. And what could be a better time than the New Year to put your ‘tax-saving’ investments on track? Happy New Year.

A famous scientist, who was crowned as the ‘Person of the Century’ by the Times magazine, once said, “The hardest thing in the world to understand is the income tax.” There is no denying that income tax is something most of us love to hate. And that’s not just because of the tax outgo. What we actually despise is the complexity of it. Due to this, many of us fail to make optimum tax-saving choices. This hurts our financial outcomes in the long run. In reality, you don’t have to worry about how complex the Indian tax code is. As an investor, your choices are welldefined. The cover story in this issue will introduce the various tax-saving options to you, along with tax-saving equity funds. You can compare the various choices and pick the one most suitable for you and that’s that. The real challenge in the taxsaving process is not its complexity but our own mindset. How we see tax-saving impacts our outcomes from it. How best to approach tax-saving then? The answer is don’t aim for that. Don’t worry about saving the tax; worry about accumulating a corpus for a long-term goal and see tax-saving as a by-product of that process. For instance, if you want to accumulate a certain corpus for your retirement, you can do SIPs in a good tax-saving equity fund. This way you won’t just save income tax but also build wealth. SIPs ensure that you invest consistently and in a disciplined manner, which is a remedy for our forgetfulness and indolence. And what could be a better time than the New Year to put your ‘tax-saving’ investments on track? Happy New Year.