January 2018

Reduce Tax , India Taxes, Save Money in tax , Year end TAX planning

Five SMART things to do in Jan / Feb / March from TAX perspective.

Last 3 months left for financial year end.
Five SMART things to do in Jan/  Feb / March from TAX perspective. (Financial Year End 2017-2018 ends in March)
1. Make sure that the 80C investments are done 1.5L for you and spouse(if applicable)
2. Check your short term Capital Gains (from Stocks/MF) – if possible plan to REDUCE GAIN by realizing losses (if any) from underperforming MF or Stocks
3. Check your Other sources of Income and make sure to pay timely Advance TAX to avoid interest cost later.
4. Do not generate income by means of selling assets (House/MF/Stocks/Bonds/etc) in Feb / March. POSTPONE it to April (next financial year)
5. Make timely declarations to your company for components like HRA/Interest/Loss from house property/80C declarations etc.
Conceptually, All the above helps INCREASE your monthly Cash Flow.
Plan to keep things SIMPLE. Simplicity is the way to BRILLIANCE….
… Kapil

July 2013

What is Wealth Tax?

Wealth Tax in India, Tax planning, Tax filing, Assets which are liable to taxes

There may be liberty and justice for all, but there are tax breaks only for some. ~ Martin Sullivan

A majority of the tax payers in India are ignorant about the wealth tax, and it’s implications.

Wealth tax is a good potential annual recurring income stream for the government. However, it is perplexing why the tax authorities are lax on this aspect of tax collection. Political compulsions, Pressure from the affluent to look the other way, or probably because they have more pressing revenue sources, whatever the reasons may be, the common man needs to be aware of the implications of wealth tax, as the authorities can come after them at any point in time.

So what is Wealth Tax?

Wealth tax is a direct tax levied on the ownership of certain assets by individuals and Hindu Undivided Families (HUFs) even though these assets may not generate any income. It is an annual tax and is imposed with reference to the previous financial year or the present assessment year. It is governed by the Wealth Tax Act, 1957. 

The assets which are taxable under the Wealth Tax Act are residential property other than one house, guesthouse, farmhouse, motor cars, precious metals including those in (more…)

November 2012

Section 80C Tax saving investments

section 80C, tax saving investments, ELSS, PPF, NSC, Senior Citizen Savings, Pension Funds,

Income during an income year of an Individual is assessed for tax under Income Tax Act 1961. It is general tendency of assesses to commence savings during the end of the Income Year, mostly to seek exemption from Income Tax thus reducing Income Tax liability. They have to combine their savings with financial planning

Section 80C 
Under section 80C, a deduction from taxable income is allowed subject to a limit of 1Lac.

The following investment routes can be used to avail this tax benefit.

  1. Life insurance premium paid for traditional products.
  2. Unit-linked insurance plans (ULIPs).
  3. Pension plans.
  4. Repayment of the principal component of home loan.
  5. Employee provident funds (EPFs).
  6. Equity linked saving schemes (ELSS).
  7. Tuition fees paid for children.
  8. Five-year tax saving bank deposits.
  9. Public provident funds (PPFs).
  10. National savings certificates (NSCs).
  11. Senior citizen savings schemes (SCSs).
  12. Stamp duty and registration charges.
  13. Infrastructure bonds.
  14. Pension funds.
  15. Post office time deposit – five years.

Tax Planning involves making investments with the objective of minimizing the tax liability and maximizing returns. Ideally, one should carefully  plan and invest through the year rather than at the end of the year in order to take the tax advantages.