Investing for the purpose of tax saving is a recurring and long-term exercise, but many people tend to do this at the last minute. In this hurry, many investors choose wrong products, which are not in line with their goals or portfolio. And often, because of lack of planning, many fall short of funds to invest at the last moment, or pay without thinking about whether the payment method will be accepted when it comes to availing tax deductions. As a result of this last minute scramble, even if the investor has managed to buy what she wanted, she may not get the tax benefits. Here are a few cases where even after investing to get tax deduction, you cannot avail the benefit.
Health-related products
Each tax-saving avenue has a set of rules regarding exemption limit, lock-in period and mode of payment. While you can pay by cheque, through Internet banking, credit card or by cash, in some cases, cash payments will not be considered for tax deductions. Know these specifications so that your tax-saving investments don’t go to waste.
