Why your tax planning should start early

Most of us have the bad habit of procrastination, which means deferring tasks which are necessary to a later date or until they are very urgent. The same applies to many investors who keep on looking for reasons to delay investments. Tax planning is no exception to this habit and many of us wait till January or until a letter from the human resource department asks for investment proofs, whichever is earlier.

Tax planning should not be a year-end exercise; rather, it should be done around the year. If you wait till the last moment to invest, you may invest in haste without proper contemplation and select a product which may not be suitable for you. Such investment in haste might serve your purpose of saving your tax, but it may not be fruitful in the long-term. Hence, it is more like winning the battle but losing the war. Therefore, you should plan your investment early.
 
So what should one do?

You should invest regularly and periodically the benefits of which are following.

·         Lighter on the wallet as you don’t have to shell out Rs. 1.5 Lakhs at one go
·         It brings discipline to investing
·         No last minute planning
·         Advantage of rupee cost averaging
·         Ease of investment
·         No liquidity crisis
·         Takes out the risk of market timing