Pay attention to liquidity needs while selecting tax saving instruments

Investors in higher tax brackets may avoid products taxed at the slab rate

If you have not begun your tax-saving investments yet, it is time to start the process. Postponing it for the fourth quarter could result in a cash crunch. Tax-saving related mistakes occur primarily when investors choose products in haste at the last moment. Also, these investments should not just be made for tax saving; they should also help the investor achieve his financial goals. Here are a few common mistakes that should be avoided:

Investments not linked to goals

People often choose products like equity-linked savings schemes (ELSS) because their past returns are good. But before doing so, the investor