Tax Day Blues? Turn It Around with These Last-Minute Tax Breaks

Hello, and welcome to another edition of Advisory Way’s newsletter, where we share insights and tips on accounting and finance for all type of Businesses.

The clock is ticking, and Tax Day is looming. If you’ve been procrastinating your tax planning, fear not! Here are some last-minute tax-saving strategies to help you optimize your finances before the deadline.

1. Evaluate Your Tax-Saver Investments

Before diving into new investments, take a moment to review your existing ones. If you declared your proposed investments under the old tax-exemptions regime in April 2023, your employer likely factored in your employees’ provident fund (EPF) contribution while calculating your tax liability. So, part of the Rs 1.5-lakh 80C limit is already accounted for. Check your children’s school fee receipts – tuition fees are eligible for deduction under section 80C. Also, consider your ongoing life insurance premiums or public provident fund (PPF) contributions1.

2. Don’t Panic, Prioritize

The rush to meet the March 31 deadline can lead to hasty decisions. Take a deep breath and prioritize. Consider avenues like:

• Equity-Linked Saving Schemes (ELSS): These mutual funds offer tax benefits under section 80C.
• National Pension System (NPS): Contribute to NPS for additional deductions.
• Health Insurance Premiums (Section 80D): Ensure you’ve utilized this benefit.

3. Avoid Common Mistakes

• Last-Minute Blind Spots: Some highly educated individuals postpone tax planning due to tight schedules. Don’t fall into this trap. Start early next year!
• Instrument Selection: Opt for suitable instruments. PPF (15-year tenure) or tax-saver fixed deposits (5-year lock-in) are popular choices but align them with your broader financial goals.
• Children’s Tuition Fees: Leverage this deduction if applicable.
• Freshers, Take Note: Identify suitable instruments – seek professional advice if needed.

4. Hacks for More Money in Hand

• Tax-Saving Fixed Deposits (FDs): Banks offer FDs with a 5-year lock-in period. These qualify for deductions under section 80C2.
• Exemptions on HRA: Pay rent to parents and avail HRA exemptions.
• Charitable Donations: Contribute to eligible organizations.
• Medical Treatment Deductions: Explore deductions for specific diseases.
• Double-Check Existing Benefits: Ensure you’re not missing out on any existing tax benefits3.

5. Conclusion

Don’t let Tax Day blues get the best of you. With these last-minute tax breaks, you can turn the tide in your favor. Remember, even spaghetti needs a dash of olive oil to shine – consider these tax-saving strategies your financial seasoning!

If you are looking for a reliable, affordable, and high-quality accounting outsourcing partner, look no further than Advisory Way. Contact us today, and let us take care of your accounting needs, while you take care of your business.

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