abhishreshthaa
Abhijeet S
Every individual who falls in the taxable bracket has a tax liability. There was a time when , personal income tax was as high as 97.5% and wealth tax was 12%. But now the taxation scenario has changed. People are more willing to pay taxes. They are ready to follow the rules and regulations as the tax rates have also gone down drastically.
The maximum income tax rate is 30% and wealth tax is 1%. By appropriate tax planning, an individual can avail various rebates and concessions thereby reducing his/her tax liability.
• Taxes in India are of two types, Direct Tax and Indirect Tax.
• Direct Tax, like income tax, wealth tax, etc. are those whose burden falls directly on the taxpayer.
• The burden of indirect taxes, like service tax, VAT, etc. can be passed on to a third party.
Income Tax is all income other than agricultural income levied and collected by the central government and shared with the states.
According to Income Tax Act 1961, every person, who is an assessee and whose total income exceeds the maximum exemption limit, shall be chargeable to the income tax at the rate or rates prescribed in the finance act. Such income tax shall be paid on the total income of the previous year in the relevant assessment year.
The total income of an individual is determined on the basis of his residential status in India.
Different heads under the Income Tax Act 1961 is as follows:
1) Income from salary
2) Income from business and profession
3) Income from house property
4) Income from capital gains
5) Income from other source
The following section gives a detailed view of the tax planning techniques that are beneficial to one and all.
1) Tax planning through long term capital gains from equity shares.
2) Tax planning through established growth stocks.
3) Tax planning for family.
4) Tax planning through fixed income investments.
It is said that there are only two certainties in life- death and taxes. Both are inevitable. We meet both are unwillingly. Unfortunately the comparison ends there. Death relieves the person from all earthly worries. Taxation on the other hand neither fully kills the person nor lets him/her live in peace.
There is one more thing in favor of death over taxes- death does not get worse every time the budget is presented by the finance minister!
There are three methods by which financial planners can reduce your tax burden :
1) Tax evasion
2) Tax avoidance
3) Tax planning
There are two basic assumptions of dignified and honorable tax planning:
1) All relevant facts are clearly presented to the tax authorities, and no material information is deliberately concealed with an intent to defraud.
2) There are no bogus transactions or make believe devices resorted to in order to circumvent any legal provisions.
You can reduce your tax liability by arranging your financial incomes and investments in such a way as to enjoy the maximum tax benefits by making use of all the beneficial provisions and tax incentives, which are incorporated in the tax laws that entitle you to rebates and concessions.
Most of the tax incentives oriented, and not only saves your tax also boost the economy of the country in the long run. Tax planning is both perfectly legal and encouraged by tax authorities
The maximum income tax rate is 30% and wealth tax is 1%. By appropriate tax planning, an individual can avail various rebates and concessions thereby reducing his/her tax liability.
• Taxes in India are of two types, Direct Tax and Indirect Tax.
• Direct Tax, like income tax, wealth tax, etc. are those whose burden falls directly on the taxpayer.
• The burden of indirect taxes, like service tax, VAT, etc. can be passed on to a third party.
Income Tax is all income other than agricultural income levied and collected by the central government and shared with the states.
According to Income Tax Act 1961, every person, who is an assessee and whose total income exceeds the maximum exemption limit, shall be chargeable to the income tax at the rate or rates prescribed in the finance act. Such income tax shall be paid on the total income of the previous year in the relevant assessment year.
The total income of an individual is determined on the basis of his residential status in India.
Different heads under the Income Tax Act 1961 is as follows:
1) Income from salary
2) Income from business and profession
3) Income from house property
4) Income from capital gains
5) Income from other source
The following section gives a detailed view of the tax planning techniques that are beneficial to one and all.
1) Tax planning through long term capital gains from equity shares.
2) Tax planning through established growth stocks.
3) Tax planning for family.
4) Tax planning through fixed income investments.
It is said that there are only two certainties in life- death and taxes. Both are inevitable. We meet both are unwillingly. Unfortunately the comparison ends there. Death relieves the person from all earthly worries. Taxation on the other hand neither fully kills the person nor lets him/her live in peace.
There is one more thing in favor of death over taxes- death does not get worse every time the budget is presented by the finance minister!
There are three methods by which financial planners can reduce your tax burden :
1) Tax evasion
2) Tax avoidance
3) Tax planning
There are two basic assumptions of dignified and honorable tax planning:
1) All relevant facts are clearly presented to the tax authorities, and no material information is deliberately concealed with an intent to defraud.
2) There are no bogus transactions or make believe devices resorted to in order to circumvent any legal provisions.
You can reduce your tax liability by arranging your financial incomes and investments in such a way as to enjoy the maximum tax benefits by making use of all the beneficial provisions and tax incentives, which are incorporated in the tax laws that entitle you to rebates and concessions.
Most of the tax incentives oriented, and not only saves your tax also boost the economy of the country in the long run. Tax planning is both perfectly legal and encouraged by tax authorities