Why you should Plan your Taxes at the start of the Year?

POSTED BY Jagoinvestor ON April 10, 2009 COMMENTS (17)

Most of the people take care of there 80C at the end of the year around Jan-Mar . Ideally it should be at the start of the year . Let us see why its should be done at the start of the year itself to plan your taxes.

Plan your Taxes

Following are the 4 most important reasons for Planning your Taxes in start of the year .

Easy on Pocket :

If you plan your taxes at the start of the year , you can then put small amount of money each month . Otherwise you will have to cough up all the money at the end of the year , which can be little difficult on the pocket .

For example :

If you want to invest 60k for this year … you have two choices , either plan your taxes in advance and invest 5k per month, or invest 60k at the end.

No Headache last moment: Another important point to consider is the tension and headache you go at the last moment because of the rush , there is sudden confusion at the end on what to take , where to go , where all the money will come from and all those things .

planning the taxes in the start of the year ensures that you do in correctly and without and headache for the last moment .

Correct products :

If you plan your taxes in the start of the year , you can do your research well and plan for products which you actually need and then go for it . I have seen most of the people taking all kind of wrong products which they don’t need, because there is just no time to think about your requirement , you just have to “invest to save tax” .

Conforms with principle of “Investing Early” : Also when you plan our taxes early you are putting your investments early, that way you are ahead of most of the other people .


An important aspect of Financial planning is to plan your taxes early . Why procrastinate when you know you have to do it anyways … Best of luck .

I have written a series of 4 articles which talks about “Buying Stocks Smartly”

You can read them here : Part 1, Part 2, Part 3 , Part 4

17 replies on this article “Why you should Plan your Taxes at the start of the Year?”

  1. Rahul says:

    OMG!!! this seems to be bible for me.. Thanks Manish.. Thanks a ton!!!!! 🙂

  2. Rahul says:

    Hi Manish,

    Was going through your post, found very Interesting. Appreciate all your hard work 🙂

    Actually I need a help from you. M very confused of how to save money. My age is 24. I just got a job and my monthly take home is 47500. Now I donno where i should invest to save money as well as tax. I don’t have any loans or commitments, neither any where to spend. I just have to pay for rent, Petrol & food..etc etc. Which is not more than 25k. Now I am left with the rest 22,,so lets take it 20 per month to save.

    Some people suggested to get mutual funds & stocks but I am damm scared 🙁 as I donno anything of it. I am a science student and not much into finace thing.

    Need your help !!! plzzzzzzz

  3. Subh says:

    Hi manish,

    Need your help for the below Query.
    I have a Fixed Life insurance which i had paid in –/Jan/2011 and i don’t need to pay the premium in monthly/quarterly/half yearly/yearly basis. Once i paid that’s all and after certain years it’ll be matured. Now my question is i had forgotten to declare the Insurance in the last financial year 2011-12. So can i declare it to this financial year 2012-13 for my tax saving? Please help out.


    1. No you cant do it , it has to be declared only in the year of payment

  4. Saurav Sinha says:

    Hi Manish… Hope Ur doing good…. 1 query… I have a relative who’s having around 20lacs money after getting retired this year… He’s a well paying job again…. age is 56 yrs… What are the best options for 1) Tax saving 2) Investment to grow wealth further… He’s a bit low risk taking person basically… No liabilities… Only a house to be either bought/constructed whos budget is 30 lacs… but not in near future… medically sound…..

    Can U help??

    1. Saurav

      I think he/she can look at Senior Citizen saving scheme option as investment , he will get 9% interest

  5. Manish Chauhan says:


    thanks for appreciation .

    However , the goal of this blog is to make you competent enough to think and take decisions yourselves about your investments .

    People often come to markets for investing and trading , without realising that it might not be there cup of tea.

    If you are not mainly in fiannce field and have some other job . The best thing for you would be to avoid direct market interaction . Choose good mutual funds for long term investments .

    If you have some time and good risk-apetite , then you should look at direct stocks , but that too with your risk apital which you can afford to loose .

    Regarding investment , I can tell you some good stocks , but criteria of pick wont be better than anyone .

    This time is a golden moment for investing for long term . If your time horizon is long (5+ yrs) , you can choose RIL , INFOSYS , TATA STEEL , HERO HONDA , TATA MOTORS etc .

    Avoid real estate .

    there is no investment for short term , the word “investment” does not fit with “short term” .

    Its called trading , which can be risky like hell . avoid it .


  6. Simple says:


    I read some of your blogs and found it nteresting. You’ve provided some great advice and smart planning tips however what will really help people like me is to recommend where to invest in today’s time for both long term and short term returns. Also what are the best instruments to save tax.

    I’d be interested in knowing where do you put your money?

    – SM

  7. Manish Chauhan says:


    most of the debt products will give almost nil or very less post tax returns . After adjusting inflation and tax , you get nothing in PPF , and some times in FD .

    The best among debt products would be PPF .

    There is no strategies involved in these instruments which can save you tab in profits from equity .

    Only Debt mutual funds losses can be used to offset the gains .


    1. Punit Gohil says:

      Hello Manish,

      A simple question

      Is there any way to find the total saving with interest in the PPF account.

      For Example

      If I pay 60k/yr

      1. Punit Gohil says:

        I think we can use the Annuity Calculator , am I right?


      2. Punit

        to get a approx figure, use annuity formula , see calculator section


  8. Asif says:

    Hi Manish,
    great work!… well i have a question regarding tax saving investments related to 80c.
    how do you compare the NSC, FD, PPF, PO savings with each other to decide the best one with respect to post tax return ? is there any strategy( like booking losses for benefit in stocks) to follow among these to optimize the post tax combined return ?
    Waiting for your suggestions…
    Thanks in advance.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

FREE Financial Health Checkup

Take up a detailed 25 questions financial health checkup to find out how much you score out of 100?