Secret To Saving Tax In 2023! 🤑🤫🤯
Hellooo 👋
If you’re here reading our newsletter it’s quite evident to me that you’re open to learning more and that you want to treat your money better. I am so proud of you! Keep at it, continue reading our emails and I promise you’ll at least learn one valuable thing that will nudge you toward working on your finances.
We are well into April, it’s a brand new financial year and I’m excited to take you through all the stuff you can do now to save money on taxes in the upcoming year, stay with me!
Spoiler Alert: If you’re stepping into a higher tax bracket this year, you’re in for a treat, and we also have a very pragmatic guest writer sharing her top-secret insights 🤫
😱 ‘Sup with the market?
🎯 Figuring The Financial Goals For 2023-24
I know you’re reading through to learn hacks to save money on taxes and what to invest in but stop right there. Whatever we suggest/anyone on the internet tells you to do isn’t one-size-fits-all. As old-school as this may sound, the #1 step to this is sitting down with yourself and understanding your financial goals.
Do you plan on buying a house or a car? Do you want to save up for travel, or are you simply parking your money to watch it grow over the next 3-5 years?
Simply put, I am asking you to decide the duration of your commitment to saving and investing so you can comfortably look at investment options in line with it. Figuring out your financial goals is pivotal because each goal has different risk & return expectations, and will therefore require distinct investment options.
📈 Investment Options For You
Now that you have an idea about how long you want to stay invested, here are a few options to give you direction on investment options you can look at:
Tax on investment income differs based on the security held and the holding period. Before we dive in, you must understand two things:
Any profit made from the sale of capital assets is known as a capital gain.
Long-Term Capital Gains (LTCG): Gain (or loss) from the sale of a qualifying investment that has been owned for longer than 12 months at the time of the sale.
Short Term Capital Gains (STCG): Gain (or loss) from the sale of a qualifying investment that is disposed of within 12 months of purchase.
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📌 Insane Tax Savings ft. Twinkle Jain
Twinkle is a resourceful finance creator (do follow her if you don’t already!) Apart from that, she’s a Chartered Accountant who also aims to make everyone their own CA. So, here’s an excerpt of what she has to say about saving tax: a teeny bit of making that happen for you:
The market volatility is insane. However, you can save money while selling your investments, even if you had incurred losses. Here are three tax-saving tricks to save your tax even in the downturn of markets.
Setting off losses: Interestingly, losses incurred in investments like shares or equity mutual funds can be offset against gains made in other such investments to reduce the tax that you must pay on gains. While short-term losses can be set off against both short-term and long-term gains, long-term losses can only be set off against long-term gains.
Carry forward losses: Unfortunately, if your losses are so high that you are not able to set off all your losses in the year against gains in the same financial year, you can carry them forward for upto 8 assessment years if you have file income tax returns within the due date and not as belated returns.
Saving Tax on Debt Mutual Funds: In the proposed budget in Feb 2023, tax rules were changed for debt mutual funds. Earlier, the indexation benefit of adjusting inflation for LTCG after indexation benefit were taxed at 20%. But now, after the change in tax rules, you need to pay tax on the net profit earned (without indexation) according to your slab rate only. So, always compare the estimated tax liability before investing in debt mutual funds if you fall under the higher tax slab.
*Debt Mutual Funds referred here are the ones in which equity investments do not exceed 35%
🫱🏽🫲🏽 Mutual Panga
We have a great list of our top picks with tax-saving Mutual Funds you can proactively invest now to save taxes in FY 2023-24. But stay tuned for it to reach you in the next few days, okay?
🎬🍿 Coolest thing I watched this month!
I watched Murder Mystery 2, because, of course, the first part was incredible! But if I’m being honest, I am simp for the Jen-Adam combo ever since Just Go With It. I really needed to chill after a busy week, and the comedy and chemistry in this movie were simply perfect!
🍹Cocktail Pe Charcha
Is it too overwhelming to research & plan your investment? Say no more. We can personally guide you into mixing the perfect financial cocktail to manage your money!
It’s 2023 and luckily saving money on taxes isn’t a far-fetched top-secret affair. So many of these hacks are accessible to you in your finger tips, so use it to your favour.
Go ahead and create a folder in your saved section and start bookmarking stuff that means something to you so you can discuss it with your CA and reap benefits. Becuase it’s 2023, and leaving money on the table is just not smart! Not now, not ever.
I'll write to you in a very soon!
Sayali ❤️