3. Ignoring the lock-in period

All Section 80C investments come with a lock-in period, ranging from three years for ELSS and extending till retirement for the NPS. Be sure to match the lock-in period with your requirement before you make the investment.

Do proper researches before you invest. The PPF, for instance, has a 15-year lock-in term, but this progressively comes down over the years. In the 14th year, the lock-in period is only one year. Besides, you can make partial withdrawals after five years.

4. Maintaining Too Much or too less

If you are employed, taxes will be taken out of your income, but it's very important to make sure that you are not taking out too much or too little. If your withholding is off base, you could be stuck owing a large sum or getting too much in a refund.

 Your withholding is determined by the information you fill out on a form, which you probably filled out when you got hired. This form usually includes information regarding your marital status and the number of dependents in your household.

5. Investing without even thinking about taxes

Taxes on dividends and capital gains will take away a big chunk of your return on investments. Rates vary, but high-income earners could give back as much as of their capital gains. For most people saving for retirement, it's wise to consider a plan that offers a way to avoid or reduce these taxes, or to otherwise reduce your liability.

If you are an employee of a company then, any money you contribute is deducted from your taxable income. Many financial advisors suggest about retirement accounts, as it's not easy to predict what tax bracket you will be in when you retire.