Many would agree that tax planning is a nightmare, considering the complex procedures a taxpayer has to go through.
Before a financial year ends, an individual has to gather all his or her documentation either for paying taxes or for filing return.
There are levels of procedures for claiming a deduction in various categories.
Hence, it's a vast procedure, and sometimes many are left with last minute documentation to meet the deadline.
However, it is always best to keep necessary things in check in order to avoid mistakes while tax planning.
Here's a list of mistakes that one needs to avoid while tax planning, according to BankBazaar.
Health Insurance Premium In Cash
Section 80 (D) enables an individual to lower the taxable income by Rs 25,000 (for non-senior citizens).
With this tax deduction, an individual can claim Health Insurance premiums paid on behalf of self, spouse, children, and parents but only if the premium is paid through a non-cash mode such as cheque, online, etc.
The report says, "In the last-minute rush, people often make the mistake of paying through cash and so end up paying higher tax despite buying a health policy,"
So in case, if you plan to avail benefit under section 80 (D), you need to avoid paying in cash your health insurance premium.
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