Skip to main content

Tax Planning: Take Control of Your Taxes

 

 

File-Proof

Return filing is the final step in getting the tax equation right. Salaried persons (Forms 16 and 12BA are relevant only for them), businessmen and professionals can check out the papers they will need from this list

  • PAN card
  • Form 16 and Form 12BA (showing perquisites) from employers in financial year
  • Form 16A, showing tax deducted from income sources other than salary, such as bank term deposits
  • Bank statements showing interest earned and exact amount of any advance tax paid
  • House rent receipts for HRA deduction
  • Home loan principal and interest repayment certificate for financial year
  • Educational loan interest repayment certificate for financial year
  • Documents for assets sold and purchased
  • Gift deeds of monetary gifts, clearly showing that money was received without any consideration
  • Health insurance premium receipt
  • Receipts for contributions to Sec. 80C schemes

To get taxes right, you need to show in the tax return your income sources and the tax benefits you availed to minimise tax outgo in the financial year. To have control over the return filing exercise, keep all the relevant documents and submit the necessary information to the IT Department on time. You are not required to enclose the supporting papers with your return of income. Both salaried and non-salaried persons should securely keep the papers related to tax filing of the past seven years, including the current year, as the IT Department can seek them for scrutiny.

The tax benefits allowed and the papers required for filing return listed in File-proof are common for businessmen, professionals and salaried individuals except for Form 16 and Form 12BA which are relevant only for salaried people. These forms need to be taken from all the employers a person has worked for in the financial year. For a salaried person, the crucial task of enumerating the incomes and the deductions for tax benefits is done by his employer through these two forms. If you are a businessman or a professional, you need to figure it out yourself.

Tax control for businessmen and professionals. The amount of tax a business entity or a professional need to pay depends on the gross receipts minus the expenses incurred for running the business or profession. Expenses that satisfy two conditions qualify for deduction from income. One, they should be directly related to the running of the business or profession and two, they should have been incurred during the financial year. Documentary evidence in the form of bills and receipts needs to be furnished for such expenses.

If a car was used for your business, you can claim deductions, among other things, for petrol bills, insurance premium and maintenance charges. If you employed people to keep the work going, their salaries are eligible for deductions if you have documentary proof for it. Payments made through debit cards, credit cards and cheques can also be claimed for tax benefit as evidence can easily be traced and furnished to show that they were actually made. Personal expenses do not qualify for deduction.

If you are running the business or profession from your home, then electricity and home bills can be shown to claim tax benefit. However, claiming the full expense may be contentious for you. For example, a doctor who practises his profession from his home uses utility services like electricity and phone for both personal as well as professional purposes. Such expenses need to be shown as shared. Tax benefit can be claimed only on the proportion of such expenses that went into running the profession or business and not on the entire amount.

Similarly, if a multi-storey apartment taken on rent is used for both residential and professional purposes, expenses incurred on the apartment like rent and electricity cannot be claimed for tax benefit in entirety.

 

Popular posts from this blog

SBI Magnum Tax Gain Scheme 1993 Applcation Form

    https://sites.google.com/site/mutualfundapplications/tax-saving-mutual-funds-elss     Investment Details Basics Min Investment (Rs) 500 Subsequent Investment (Rs) 500 Min Withdrawal (Rs) -- Min Balance -- Pricing Method Forward Purchase Cut-off Time (hrs) 15 Redemption Cut-off Time (hrs) 15 Redemption Time (days) -- Lock-in 1095 days Cheque Writing -- Systematic Investment Plan SIP Yes Initial Investment (Rs) -- Additional Investment (Rs) 500 No of Cheques 12 Note Monthly investment of Rs 1000 for 6 months and quarterly investment of Rs 1500 for 4 quarters.

Birla Sun Life Tax Plan Online

Invest Birla Sun Life Tax Plan Online   An Open-ended Equity Linked Savings Scheme (ELSS) with the objective to achieve long-term growth of capital along with income tax relief for investment.   After a bad patch from 2008 to 2010, Birla Sun Life Tax Plan has made a big comeback in the last five years, with a particularly good run since 2014. The fund's rankings, which had slipped to two stars in 2011-12, recovered sharply to three-four stars in the last three years. The fund has delivered a particularly large outperformance over its benchmark and peers in the last couple of years. The fund's investment strategy focuses on a diversified and high-quality portfolio, with parameters such as capital ratios and balance-sheet strength used to judge quality. It uses a combination of top-down and bottom-up approaches to take sector/stock positions. The fund avoids highly leveraged plays. Staying more or less fully invested at all times, the fund parks roughly half of its portfoli

Should you Roll Over 1 year Fixed Maturity Plans?

The period between January and March typically sees an uptick in the launch of fixed maturity plans, or FMPs. Not this year. Instead, fund houses are busy rolling over or extending the tenure of their one- year FMPs launched last year to three years. Investors in one- year FMPs have a choice. Either redeem units or roll over to three years. If you exit now, your gains will be added to your income and taxed in line with your individual slab rate of 10, 20 or 30 per cent. If you stay invested for two more years, you pay 20 per cent tax with indexation benefit. Yields have softened in the past few months on expectations of a rate cut. If the central bank continues its soft monetary stance, yields are likely to fall further. In such a scenario, it makes sense for investors, particularly those in the 30 per cent tax bracket, to roll over their investments and lock in at a higher yield now. In a surprise move, the Reserve Bank of India cut repo rate by 25 basis

Mutual Fund Review: IDFC Premier Equity Fund

  IDFC Premier Equity Fund, which falls under the presumed high risk group of mid- and small-cap schemes, can rely on astute and timely equity picks. These make it less vulnerable to fluctuations compared with others in the category   IDFC Premier Equity Fund is designed to invest in upcoming, but promising businesses available at cheap valuations, and hold on to these businesses until they reap desired returns. The experiment has been successful so far, and IDFC Premier Equity has emerged as one of the top performing mutual fund schemes in the mid- and smallcap category of equity schemes.    While the scheme is an open-ended equity fund, i.e. open for subscriptions throughout the year, it has a unique philosophy to limit fresh inflows. Thus, while an investor can always take the systematic investment plan ( SIP ) route to invest in the scheme throughout the year, inflows through a lumpsum investment have been restricted. Since inception, IDFC Premier Equity has been opened for l

IDFC Premier Equity Fund dividend

  IDFC Mutual Fund   has announced dividend under the dividend option of   IDFC Premier Equity Fund Direct-D . The quantum of dividend shall be   R 4.3464 per unit.   The record date has been fixed as May 06, 2015. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot]
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now