InvestorQ : Only a week is left for the financial year 2019 to end. What are the last minute tax saving investments?
Ria Jain made post

Only a week is left for the financial year 2019 to end. What are the last minute tax saving investments?

Answer
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Mitali Bhutta answered.
1 year ago


Financial experts never recommend last minute tax saving investment plans. Planning tax saving investments in the last few days of the financial year would not work. Despite making the investment you may fail to claim the tax benefit for the particular financial year. It could happen for any reasons like your claim may get rejected due to a technical error. Sometimes your cheque does not get clear in time or gets rejected for some reason.
You must choose an eligible tax-saving investment for the current year is within the financial year April 1 to March 31, 2019 (both dates inclusive). Choose suitable tax saving investment options for you. Don't be in a hurry and lose focus as you may end up investing in unsuitable avenues.

Following are some classic investments that most of the people find it better to invest in this season;

PPF investments:
Experts say PPF is one of the popular tax-saving avenues. Most of the people choose to have PPF accounts with post offices and the balance in a designated bank. This investment option is also quick to activate. It is ideally be done via cheque or electronic transfer but through not cash. All you need to fill an online form with your desired Internet banking account. And submit it with the required documents. This may require 2-3 days to get active. You can also simply transfer the funds online from the linked savings account of the same or another bank if you are a PPF account holder. You can opt for a standing instruction for online fund transfer to the PPF account.

ELSS of mutual funds investment:
Recently Equity Linked Saving Schemes (ELSS) is also emerging as an ideal tax- saving instruments. ELSS saving instrument is recommended as among all the tax-saving instruments it offers the lowest lock-in period of 3 years. Also, if you hold it for a longer period It benefits with higher returns. The online investment of ELSS is only available till 3 PM on days when the stock market is open. If the investment is done post 3 PM, it would be accepted at the NAV of the units on the next day. Thus, looking at the calendar I would say that you must initiate your ELSS investment on or before 29th March 2019 (provided you need to have a KYC compliant account).

Bank fixed deposit:
I think if you want to go for a hassle-free way of tax saving investment idea you can go for the five-year tax-saving fixed deposit. However, you must need to have a KYC compliant account. Like the above two investment types, you can open it through your desired bank's Net banking account and invest from there. You don't have to worry about the redemption process. On maturity, fund directly gets credited to your linked saving account. You can expect average returns through this investment.

Life insurance policy:
In most cases I find people buying life insurance policies at the end of the financial year to save tax. Life insurance as its own relevance in your life and less for tax saving benefits. You must check its pros and cons before choosing a scheme for you. You must note that your primary motive must include a risk cover in case any uncertainties (eg.death). Be aware I have been through some insurance agents who tried selling some irrelevant insurance policies to me.
If you have decided to buy insurance online on the last working day of the financial year it will be issued to you by the first week of April 2019 which is considered as the next financial year. Such situation will not get the tax benefit. However, the premium amount is refunded.


user profile image
1 year ago


With only a week left, you will need to evaluate the available options under various sections of the Section 80. Please run a check if your investments under Tax saving investment options like ELSS and PPF is reaching 1.5 lacs. If not, these investments can be done immediately.

Also check if Mediclaim for self + spouse + children is 25K. If your parents are above 60, you can have a Mediclaim up to 50K for them.

A donation to a NGO which can provide you with a claim under 80G is not an investment, but a gesture which can earn you additional tax benefits.