Let Tax Planning Increase Your Returns Too!

The last quarter of a year is always hectic for many of us from a tax planning perspective. The first thing that comes to our mind is all the options available under Section 80C of the Income Tax Act 1961. Some of the most popular investment avenues under this section are ELSS, tax-saving FDs, investments in PPF, and others. These tools are most actively used to save tax, which is a part of tax planning. From the financial year 2019, however, equity investors have a new tool to plan their tax with a long-term perspective.

Now you can indulge in capital gain tax harvesting that was not heard of earlier by Indian equity investors. You can use it effectively to optimise your post-tax returns on equity investments. Although it will give you a tax benefit, not today but in the future, it will help you to reduce your overall tax burden. Our cover story of this issue dives deep into this subject to make you understand it with three different case-studies on how effective tax gain harvesting helps in improving your overall investment returns.

There is one other aspect to investing with respect to savings tax: most of us mix insurance with investment. We take life insurance policies to save on tax. These are not pure life insurance policies but their variants that also promise certain returns. Investors believe that this will help to solve the dual purpose of investment as well as insurance. However, in reality, it will neither give you the required protection nor the required returns. One of the special reports in this issue will help you to understand why you should not mix them. Hope this issue will help you to take an informed investment decision and then engage in tax planning.

SHASHIKANT