New Delhi: In short, it's important that you plan your investments right away for this financial year. You don't need to invest any money now. The sole aim of the exercise is to cut down your tax payments. In other words what is required of you, right now, is to jot down your wish list related to investments and expenses that you propose to undertake during the period up to 31st March 2007.

Be it individual tax payers or Hindu Undivided Families (HUF), both categories need to plan all investments and expenses that they propose to undertake during the current financial year with an aim to cut down income tax payments as a result of tax deduction specially in terms of section 80C of the Income tax Act, 1961.

Plan Your Investment

If you are employed you need to inform your employer about the projected investments, you plan to make. Know that it is only on submission of the details of your proposed investment for the purpose of tax saving that the employer would deduct the same to arrive at your monthly figure of 'Tax'. This would be deducted at source from your salary income. Hence prepare details of your proposed investment schedule and submit the same to your employer right away.

Once this is done your tax would be deducted keeping the proposed tax deduction as per those under section 80C, 80CCC and 80D of the Income tax Act, 1961.

And you could make the the actual investments at a future date on or before 31st of March 2007. What a great big idea for salaried employees to enjoy tax saving right now without actually making investment.

Those individuals who are not employed as also those who fall under the Hindu Undivided Families (HUF) category should plan their proposed investment figures right now and keep them handy. This would be helpful when they contemplate making payment of Advance Tax. However, they too can make investments by 31st March 2007.