2 Years to Save Tax on Sale of Property

Important Number – 2

If you never pay tax with a happy heart, then atleast you must try to reduce your tax liability. You can claim tax exemption under Section 54 on the long-term capital gain from the sale of your house, if you plan to use the entire profit for purchasing another house within 2 years. Even if you buy a second house within a year before selling the first one, you can still avail the tax exemption.

3 Months' Expenses in an Emergency Fund

Important Number – 3

A good financial planning is never complete without considering the expenses to be incurred during emergency situation. You should maintain a contingency fund to cover eventualities such as job loss or medical issues. It is advisable to set aside funds equivalent to your 3 to 6 months of living expenses, so that even if an emergency situation arises you will be financially prepared to face it. Avoid placing this fund in your regular bank account. Instead put your contingency cash only in liquid funds or a separate savings account. You may not gain a significant interest, but it will be easier for you to avail it when you actually need it during emergencies.