Can Tax Planning Services in Chennai Help Me Save on Taxes?
Whether it’s the end of a financial year or the beginning of another, one thing that constantly worries people is taxes. Many individuals either delay or completely avoid investing, simply because they fear the complexities of taxation. But what if you could invest and save taxes at the same time? Sounds like a win-win, right? Yes, tax planning services in Chennai can help you do exactly that.
What is Tax Planning?
Before we dive into the options, let’s first understand the basics.
Tax planning is the process of managing your finances in a way that allows you to legally reduce your tax liability. It includes making smart choices about investments, expenses, and incomes. It helps you take full advantage of deductions, exemptions, and rebates allowed under the Income Tax Act.
Why Do You Need Tax Planning?
While information is available online, tax laws can be confusing. Rules change, forms get updated, and each person’s income structure is different. This is where the best tax planning company in Chennai, Fairmoves, comes in.
Here's how a professional can help you:
- Analyse your income and expenses
- Suggest tax-saving investments suited to your goals
- Help you claim applicable deductions (like under Section 80C, 80D, etc.)
- Keep your finances compliant with the latest tax regulations
- Assist in filing returns accurately and on time
But the most important advantage? They can help you invest smartly and reduce your taxes.
Introducing ELSS – A Smart Way to Save Taxes
One of the most popular and effective tax-saving investment options recommended by financial planners is ELSS – Equity Linked Savings Scheme.
ELSS is a type of mutual fund that invests primarily in equities (stocks) and comes with a lock-in period of 3 years. It qualifies for tax deduction under Section 80C of the Income Tax Act, which means you can claim a deduction of up to ₹1.5 lakh in a financial year.
Let’s say you invest ₹1.5 lakh in an ELSS fund. You can reduce your taxable income by that amount, which directly reduces the tax you pay.
How Does ELSS Help You Save Taxes?
Let’s break it down with an example:
Suppose your annual taxable income is ₹8 lakh. Now, if you invest ₹1.5 lakh in ELSS, your taxable income becomes ₹6.5 lakh. Depending on your tax slab, this could lead to savings of ₹30,000 to ₹46,800 in taxes.
And the best part? Your money is not just locked somewhere. It is invested in the market and has the potential to grow. So you are not just saving on taxes, you’re also growing your wealth.
Benefits of Investing in ELSS
Here are some key advantages of ELSS, especially when used for tax planning:
- Shortest Lock-in Among 80C Options
Most tax-saving options like PPF (15 years), NSC (5 years), or fixed deposits (5 years) have long lock-ins. ELSS comes with a lock-in of just 3 years, which is the shortest among them.
- Higher Returns
Since ELSS funds invest in equities, they have the potential to offer higher returns compared to traditional options like FDs or PPF. Historically, ELSS funds have delivered returns between 10–14% p.a., though past performance is not guaranteed.
3. Dual Benefit: Save Taxes + Grow Wealth
You don’t have to choose between saving taxes and investing for the future. ELSS lets you do both at the same time.
- Systematic Investment Option (SIP)
You can invest in ELSS via SIP (Systematic Investment Plan) starting from as low as ₹500 per month. This makes it affordable and also helps you benefit from rupee cost averaging in the market.
- Professional Fund Management
ELSS funds are managed by experienced fund managers, so even if you are not an expert in stocks, your investments are handled by professionals.
Benefits of Tax Planning Through Investments
While ELSS is one of the best options, there are other instruments too that help with tax planning — like PPF, NPS, life insurance, and health insurance. But what makes investment-led tax planning powerful is that it works towards your long-term goals like retirement, buying a house, or children’s education — while also reducing your tax burden.
Here are the overall benefits of tax planning through investments:
- Maximises Savings
You use government-allowed deductions and exemptions to reduce your tax outgo legally.
- Encourages Financial Discipline
Tax planning encourages early and consistent investments, which build a strong financial habit.
- Aligns With Life Goals
Your investments are not just random; they are chosen based on your personal financial goals.
- Peace of Mind
With expert tax planning, you can avoid last-minute confusion, missed deductions, or penalties.
Final Thoughts
Taxes can be confusing, but they don’t have to be scary. With the right support and smart planning, you can turn tax season into an opportunity to grow your wealth.
