Income Tax: Filing ITR early this time? Here are 8 key strategies to optimise tax savings

livemint.com:

Also Read: Tax Harvesting: What is it and how can it optimise your tax liabilities?From an income tax perspective, any income you generate during the current FY will be assessed for taxation purposes in the following assessment year (AY). The current FY 2024-25 starts on 1st April 2024 and ends on March 31st 2025.

The AY (2025-26) is the year in which your previous year’s income will be assessed for taxation purposes. In other words, for the income that you will be generating during this FY 2024-25, you will be filing your income tax returns in the AY 2025-26.Planning your taxes at the end of the financial year, usually during January or February each year, is not only a delayed strategy but also can be a pressuring experience.

If you remember, that’s when employees are asked to submit their investment proofs and other documents. To be precise, this year-end tax process is part of tax compliance and not tax planning!Tax planning, however, is about exploring strategies to reduce your tax liabilities, understanding the various tax-saving instruments, implementing structured savings plans and taking steps to make those tax savings happen.

Also Read: Income Tax: Make note of these 5 key points if you are a salaried taxpayerTax planning and financial planning go hand-in-hand.

Tax planning is a round-the-year exercise; ideally, it should begin at the start of a financial year. The first step of tax planning is to decide on the tax regime to opt for based on your tax situation, including your income, expenses, exemptions, and deductions.