Tax Planning

Hi All how r u doing...

Its quiet a long dormancy I have taken My apologies for that,
bit busy with work ( Its real thing Okay Okay... I could see a sarcastic grin at me on this stmt )..

Okay me back with the social awareness topic .. Yes its going to be an abstract on "Tax Planning" facilitated by my friend srikant.
Here it goes....

“Tax” the word creates a stir among salaried employees that too IT employees at the end of the financial years. The stress is given on IT employees because of inadequate knowledge about tax planning due to rapid growth in the package with in the stipulated period. The other sectors acquire a fair amount of information on tax planning due to the slow and steady growth and that is the fact too.

As Swami Vivekananda says “We are the makers of our own fate...We make our own destiny”.

So let us discuss some rudimentary artifacts of the budget 2006-07 in a way conducive enough to plan for our tax payment.

No major changes in personal income tax. If you are planning to buy a car (of length not exceeding 4,000 mm and with an engine capacity not exceeding 1,500 cc for diesel cars and not exceeding 1,200 cc for petrol cars) or if you are planning to eat packaged foods or if you are planning to quit smoking, you will get a remarkable gain.

The other things that come to our interest are, removal of the limit of Rs.10, 000 in respect of contribution to certain pension funds in section 80CCC, has also been proposed subject to the overall ceiling of Rs.1, 00,000. Investments in fixed deposits in scheduled banks for a term of not less than five years included in section 80C of the Income tax Act

The increase in service tax (from 10% to 12%) will affect most of us rather I would say all of us. If you trade shares you should think about the increase in Securities Transaction Tax.

As Roosevelt said, Taxes, after all, are dues that we pay for the privileges of membership in an organized society, and some body said, I am thankful for the taxes I pay because it means that I'm employed. So be employed and be the member of the organized society but with a plan of not paying more than we have to.

Though the companies make ease the burden of tax payment by practicing a mandatory collection of TDS which effects in our pay slips, the deviation between the declaration and the actual proof makes the huge difference in salary in last two months of the financial year. Let us cultivate the strategy to bring down the high percentage of deviation which would enable us to breath free with the mundane expenses across the financial year.

Above all we do have few so-called ‘Brahaspathis’ who evades tax with a false conviction that they took an illegal waiver from the process, we have no say on those.

Interesting fact: Tax collecting process will be foolproof.

The Departments of Income Tax and Customs and Central Excise to undergo Business Process Reengineering (BPR). Nationwide networks to connect 745 income tax offices in 510 cities and 550 customs and central excise offices in 245 cities, creating national databases.

Permanent Account Number (PAN) is the critical element in capturing incomes and expenditures. Scrutiny of Annual Information Returns (AIR) on high- value transactions reveals that 60 per cent of the transactions are without quoting PAN. In due course, more transactions to be notified for which quoting of PAN to be mandatory.

To culminate, be ware of tax planning, it is part of our life.