The simplification of the income tax structure has given flexibility to the tax payer to pick and choose his investments according to his need and risk appetite. For over five decades the government has managed people's money for them. It has defined what to invest in, how much to invest and in which manner to invest. The government by providing tax rebates, exemptions and incentives in some financial products had taken the task of managing people's money.

There has always been a mad rush at the end of the financial year when people plan their investments. Usually, in the last month of the financial year, people invest money in financial products or instruments that come with the tag lineexempted from income tax or offers tax rebates. Some people opt for the zero-risk financial products such as the National Savings Certificate or the Public Provident Fund that offer high interest rates of 8 to 9%, zero-risk and are tax-free (up to a certain limit).

By this the message is clear, "It's your money; you choose where you would like to invest." To give this further push, the government plans to provide a regulatory environment that will reduce risks and frauds and leave the planning and decision-making of one's investment to oneself. Applauding this move by the government Rahul Goel, CEO, Personal Finance, states that, "This is a step in the right direction to simplify the tax structure; it provides flexibility to the tax payer, plus it treats all individuals equally as earlier individuals whose income was above Rs. 5 lakh could not avail of this benefit. Also, this way the government is now free to focus on building a better regulatory environment."

Moving towards a free environment, one has to plan one's investments taking into consideration financial needs, age limit, and risk and return. Earlier, the sub-limits within Section 88 put a cap on the investment limit that was tax deductible such as Rs. 70,000 in post office schemes; Rs. 10,000 in ELSS, Rs. 10,000 for insurance premium; interest of home loan re-payment up to Rs. 150,000, etc.

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