You already know that investing helps your money grow. But what many people don’t realise is how much of that growth can be lost to taxes. You put your money in mutual funds, fixed deposits, or stocks and expect returns. But when tax is added to that, it quietly takes away a part of those returns, and that’s where tax planning comes into play.
Now, imagine if someone could help you invest in a way that lets you keep more of what you earn, legally. That’s exactly what a tax consultant does. They look at your full financial picture, suggest the right mix of investments, and help you make smart moves that reduce tax without compromising your goals.
In this post, let’s take a look at the step-by-step process of how working with a tax expert can actually strengthen your investment strategy.
Where Investing and Tax Planning Come Together
Every investment has a tax angle. Some attract tax every year, some only when you sell, and others offer deductions upfront. But how do you know which is better for your requirements?
That’s the part most people struggle with. You may be investing regularly, but without tax planning, you might be losing money without even knowing it. A tax consultant brings both sides together. They understand how taxes apply to different instruments and then match that with your income, age, and long-term goals.
Matching Tax-Saving Investments to Your Goals
Tax-saving investments are not one-size-fits-all. Some come with longer lock-ins. Others carry some risk, and a few offer flexibility. What works for someone in their 20s won’t work for someone nearing retirement, and that’s why a personalised approach matters.
Then there are ELSS mutual funds that are often suggested for wealth building. You get the 80C benefit, and long-term capital gains are taxed at 10% after Rs. 1 lakh.
Avoiding Mistakes That Cut Into Your Earnings
One common mistake investors make is looking at returns before tax and assuming that’s what they’ll get. But that’s not how it works. A fixed deposit giving 7% may seem good at the moment. But if you’re in the 30% tax bracket, the real return after tax is around 4.9% and that’s a big difference.
Companies like Fincart’s tax consultants help you avoid these blind spots. They also make sure you don’t miss deductions just because you weren’t aware of them. Many people don’t use the full limit under Section 80C because they don’t know what counts and a tax consultant will help make filings easier.
Another area is timing. Selling equity funds just a few days before completing a year means you pay 15% tax instead of 10% on gains. Small timing mistakes like this can cost you thousands.
That’s where having a financial consultant with tax expertise will help you. They pay attention to these small details that often get overlooked.
Tax Planning is Not a One-Time Thing
People usually think about taxes in March. But by then, it’s often too late to make meaningful changes. Tax planning should run alongside your financial planning all year round. That way, you’re always in a good position to make the right moves.
A tax consultant can help you adjust your investments if there’s a change in your income or goals. For instance, if you’ve switched jobs or got a raise, your HRA and deductions may change. You might now be eligible for new tax-saving options, or it might make sense to switch regimes.
Let’s say the government announces a change in the way long-term capital gains are taxed. A good consultant won’t wait for March. They’ll tell you in time and suggest changes to your portfolio to stay efficient.
You can’t control every market movement. But you can make sure your tax strategy isn’t holding you back.
Different Tax Strategies for Different Income Levels
The right approach also depends on how much you earn. Someone earning Rs. 6.5 lakh per year has very different needs than someone earning Rs. 20 lakh. The tax rules apply to both, but the way to use those rules is not the same.
If you earn under Rs. 7 lakh, you may be eligible for a full rebate under Section 87A. So the aim here would be to keep your taxable income below that level. Choosing tax-free investments like PPF or NPS might help.
Now, if you earn above Rs. 15 lakh, you’re in the highest slab. Here, every rupee saved in tax counts. A tax consultant may suggest using every bit of deduction available from Section 80C, 80D, 80G, and even HRA and home loan interest under Section 24.
These aren’t random suggestions. These are well-thought-out strategies that come from understanding how income, deductions, and investments all fit together.
Choosing Between Old and New Tax Regimes
This is a new confusion for many people. The old regime allows deductions. The new one offers lower tax rates but no deductions. So which one’s better?
The answer depends on your actual deductions. A financial consultant who also understands taxes can compare both regimes for you and show the real numbers. Some years, the old regime may save you more. Other times, the new one might win. You should review this every year, not just once.
Conclusion
A tax consultant is much more than someone who helps with paperwork in March. They’re someone who works with you to make sure every investment decision makes sense, not just for returns, but for taxes, too.
Premium companies like Fincart’s tax consultant can help you stay on track, avoid mistakes, and keep more of what you earn. In a country where tax laws keep changing and investment options keep growing, having someone in your corner who understands both is not a luxury; it’s a smart move.
