Tax-Saving Mistakes & How to Avoid Them

Every year, like clockwork, the January-to-March period brings a frenzy of tax-saving activity. In this last-minute rush, I see so many people make costly mistakes that can seriously hurt their long-term financial health. Let's talk about these common errors and how you can avoid them.

Mistake 1: The Last-Minute Scramble

Waiting until the deadline forces you to make hasty decisions. You end up buying whatever product is easily available, not what's best for you, just to save tax. The solution? Plan your taxes from the beginning of the financial year in April. A small, disciplined SIP in an ELSS fund each month is far less stressful and financially smarter than a large, panicked lump-sum investment in March.

Mistake 2: Mixing Insurance and Investment

This is one of the most common pitfalls. Many people buy traditional insurance policies (like endowment or money-back plans) for tax savings. The truth is, these products often provide very low insurance cover and poor investment returns. My advice is simple: keep insurance and investments separate. Buy a pure term insurance plan for a large life cover at a low cost, and use dedicated instruments like ELSS or PPF for your **80C investments**.

Mistake 3: Tunnel Vision on Section 80C

Many people think tax saving begins and ends with the ₹1.5 lakh 80C limit. This is a huge missed opportunity! You can claim other powerful deductions. For instance, you can claim deductions for health insurance premiums for your family under Section 80D, and invest an additional ₹50,000 in the National Pension System (NPS) under Section 80CCD(1B)).

As a **financial planner for tax saving**, my job is to help you create a year-round, holistic tax strategy that not only saves you money but also aligns with your most important financial goals. Let's stop the last-minute scramble together. Schedule a tax planning consultation today.