Tax planning, the right way...
- IPL spot-fixing case: Actor Vindoo Dara Singh arrested
- IPL 2013: Final No.5 for MS Dhoni-led Chennai Super Kings
- Pune Warriors withdraw from IPL, 'disgusted' by BCCI's attitude
- IPL spot fixing: Accused Sreesanth claims innocence
- Li Keqiang visits TCS, Cyrus P Mistry says China important for growth of Tata Group
Tax planning probably sounds a bit weird now, because the tax filing season just got over and nobody is really thinking about it or doing anything. Tax consultants are going on holiday this month. But smart people will realise how important it is to do tax planning right now. To save tax, you are better off starting now than later because you will have a lot more options now, time to think and make the right decision and no HR person sitting on your head to do the needful as soon as possible.
Myths and reality
Many people still have this notion that tax planning is wrong and responsible citizens should pay their taxes and not cheat. Tax planning is not tax evasion or tax avoidance. Tax evasion or tax avoidance is illegal where the letter and spirit of the law are broken. Tax planning is done well within the framework of the law and the government actually encourages you to plan your taxes by seeking investment in tax saving bonds, giving benefits under various sections etc.
Another misconception about tax planning is that it is all about investing in 80C.
People ask which is better, PPF or ELSS for tax planning? Tax planning is much more than 80C investments. It requires thoughtful planning of how your income is accounted, how you spend and invest your money and a few more nitty gritties. It is also a myth that tax planning is cumbersome and quite tricky for an average person to comprehend. Of course the tax laws are complex and dynamic, but what is applicable to the normal common person is rather simple.
Tax planning has to be integrated with your overall financial plan. In everything you do, you have to find a tax efficient way of doing it. For eg: You can invest in liquid funds or short term debt funds for emergency needs. But depending on your tax bracket, the short term funds can be more advantageous than the liquid funds or vice versa.
- 'Sophisticated' Indian cyberattacks targeted Pak military sites: Report
- Talkative Li quoted Weber, Hegel, Jobs, said PM is large-hearted
- Bihar food corp ends up with chaff as rice worth Rs 535 cr vanishes from mills
- In 7 lucrative minutes on May 9, Sreesanth bowled 6 balls, bookie made Rs 2.5 cr
- India and China ask border envoys to work on more steps
- Former Ranji player among 3 more held