Income tax is a big source of raising revenue for the government of the country, however; it brings a feeling of headache and seems like a burden when you have to pay it. Everyone seeks to escape from paying income tax as it brings a feeling of wasting money because a big part of your income become unreachable by paying it in income tax. Here are a couple of smart ways that can assist you in the reduction of income tax within 2012.

1) PPF or Public Provident fund
The public Provident fund is a smart source that can help you in escaping from income tax by contributing to the limit of 1 Lakh rupees according to Section 80C. The investment in the Public Provident fund for the year 2012 is raised from 70,000 to 1 Lakh rupees. This sort of investment is guaranteed for a steady income and a rate of return of 8.6% on the total invested amount. Keep in mind that you must have to make an investment in your PPF account of about this 500 per annum as a result of which your account will be locked for 15 years. This is one amongst the best, fixed income source that you must consider it.

2) EPF or Employee Provident Fund
EPF is a sort of forced savings that is cut down automatically from employees having a fixed monthly salary. Although, most of employee have bad reviews about Employee Provident Fund but actually it is an effective way to save income tax under section 80C. Apart from income tax relief it is also able to give you a return of about 8.5% annually. It is a good option for those who don’t have a habit of investments. Make sure to not withdraw this fund without having serious need.

3) ELSS or Mutual tax saving funds
ELSS or mutual tax saving funds is the option that you can use when you have completed your Section 80C limit and you don’t have any other option in hands to put your money in. For investment in this instrument you need t5o have a forecasting power as it leads you to stock markets and locks your invested amount for three years. It is a good option for saving income tax however you need to follow ELSS investment planning route.

4) Bank fixed deposits for five years
In five years fixed deposit plan for your money can also save you from tax under the deductions of Section 80C. Currently, the interest rate that you will enjoy is 9% per year. It is also vital to keep in mind that at maturity after the period of 5 years you will have to pay a tax. If you consider that the tax payable on maturity value then it will reduce your return from 9%.

Best Reading:

• Tax Slabs INDIA After Budget 2012
• Easy Steps to Tax Filing
• How To Accelerate Your Deductions and Handle Tax Planning Better
• Salary Definition and Tax Planning

Conclusion
All those methods that allow you to escape from income tax on the other hand give you some excellent raise in income. You can opt for any of the above and even can opt many of them.

There are two parts of a house loan reimbursement –Principal and the interests, and each of these parts is treated distinctly the calculation of tax profit functions.

The principal value is roofed underneath Section 80C and includes a limit of Rs. 1 Lakh. This can be solely on the market to you if you reside in the house for which you got the loan. This simply means that this exemption cannot be valid for under construction house or for a house in which you are not living. However, it offers you an exception in case you are working in a completely different town. In case you are employed in a totally different area then you can claim this exemption on this principal value of your home underneath 80C.

Section 24: Tax benefit of the interest rate

The interest on a home loan is treated in a different vogue, and Section 24 deals with tax factor on the repayment of a home loan. R’s. 1, 50,000 is the maximum limit underneath this section and there is no need to compulsory live in the house for claiming these benefits. The payment of interest will be subtracted from your taxable income and as a result of which your tax liability will be reduced. There is only limited to the sum of money that is Rs.1, 50,000 and has no sort of other limitations such as the numbers and location of houses you are claiming for.

Some special conditions are ameliorated such as the disbursement of getting loan primal to construction of the house and the pre-EMI interest and the RAAG has discussed all these aspects in his post about the tax benefits of a home loan.

Best Reading:

• Tax Slabs INDIA After Budget 2012
• Guidelines On Online Application For New PAN (Form 49A)
• Steps In E-filing Tax Returns

Conclusion
There is a limit to every section regarding the loan for example section 80C has limitation of one lake. The home loan is treated in different ways. The maximum limit of the home loan is 1,50,000rs. Some special conditions are also applied along with them.

Also known as the “Goods and Service Tax”, Value Added Tax is totally different from sales tax charged on exchanges. Value Added Tax is a sort of indirect tax that is charged on goods and services at different production levels. This tax is also applied to import goods with a similar rate of local production. This taxation system is picked out by lots of European and non-European countries. The neutral and clear nature of taxation has motivated VAT to come up as vigorous revenue producer in such countries.

On the other hand, by making comparison with VAT, sales tax is the percentage of the revenue applied to the retail sales of goods. Sales tax is different from VAT because it is only imposed on the entire purchased value of goods.

Contrary to the traditional sales tax system, the VAT system can efficiently communicate the issue of decreasing and input tax credit that brings an automatic rise within the consumer price level. The VAT is safe from the incident of decreasing because it is only levied on additional values in different production levels. The entire burden is borne by the end users.  Although this is an indirect form of taxation but is very much coherent. It is easy to understand because of its transparency. To make the distinction between these two types you must take help from tax professionals and accountants.

The economic impact of VAT relies on ultimate prices of the goods and services whereas the impact of sales tax falls on the terminal prices to the end users. The VAT system needs to have an efficient accounting. To cope with this weakness, same tax will be charged to each member involved in the process of production of a particular good or service. The application of this tax would stay unbiased in the position of the individual within production cycle.

Tax evasion is frequent in sales tax whereas the VAT system is free from this issue. Sales tax is usually thought as a burden if the proportion charged goes beyond 10 percent and is termed as an evasion by the end users who are connected with the purchase of such goods via the internet or through other means such as by a dealer or in wholesale. Evasion is impossible to VAT and is termed to other fraudulent tools like that of carousel fraud. This is one amongst the distinguished practices of theft for VAT. This is avoided in those countries where the goods movement between jurisdictions is free from Value Added Tax.

The Value Added Tax is one amongst the latest systems of the world’s economy and is globally accepted and is implemented in lots of countries. However, Value Added Tax comprises limitations in developing countries as like that of India. The per-governance of low per capita income in such countries comprises difficulties for government to increase revenue via income taxes. In such countries, as compared to the Value Added Tax, sales tax work as a good revenue earner for the government.

Best Reading:

• Tax Slabs INDIA After Budget 2012
• Easy Steps to Tax Filing
• How To Accelerate Your Deductions and Handle Tax Planning Better
• Salary Definition and Tax Planning

And at last Today, it takes more brains and effort to make out the income-tax form than it does to make the income.  ~Alfred E. Neuman

Indian Finance Minister Pranab Mukherjee has revised the I-T slabs now. The new tax slabs have been aligning as per the proposed Direct Tax Code (DTC).
No tax till 200,000 (from 180,000)
10% from 200,000 to 500,000
20% from 500,000 to 10,00,000
30% above 10,00,000

Now there is no separate exemption limit for women’s while for senior citizens aged above 60 will pay tax only if above Rs 250,000/-

Here are a few other points to note regarding Taxation from the budget:
• Deduction of upto 10,000 on interest on Savings Bank Accounts.
• Purchase of jewellery above Rs 2 lakh now under tax net.
• Tax exemption of up to Rs 5,000 for health insurance for annual preventive health checkup.

Tax Free Bonds:
• In FY 2013 Tax Free bonds from NHAI are expected to be of Rs 10,000 cr.
• In FY 2013 Tax Free bonds from IRFC are expected to be of Rs 10,000 cr.
• Have also proposed Tax Free bonds for Power Sector worth Rs 10,000 cr.
• Tax Free Infra bonds are expected to double to Rs 60,000 cr.

Here is some FAQ from https://incometaxindiaefiling.gov.in

Best Reading:

• Easy steps to Tax Filing
• Tax planning for first timer

If you are not much aware about all this and planning for tax first time than you should review Tax Planning For First Timers.
If we missed any points do let us know? Invest early Be Happy!
Source: http://www.incometaxindia.gov.in/

Very recently, people are clamoring for an easier and a more fast and practical way of applying for a PAN card, in short, an online way of accomplishing it. But what is a PAN card?  PAN or  Permanent Account Number  is a ten-digit alphanumeric code generated by the India’s ‘Income Tax Department’, that is  required by anyone and everyone who wish to conduct any kind of  financial transaction in India. Even those whose financial transaction is limited to paying income tax require it! PAN is required if you wish to enter the Indian Share Market. This is true for NRIs – Non Resident Indians living abroad too, who wish to make investment in India, buy property/house in India, open bank account, demat account or rent out a property.  Here then are the easy way steps in applying for a PAN card:
1. Foremost reminder: online PAN application is not available for: Government Organizations.
2. An applicant will do the filling up of Form 49A online and submit the form.
3. Once, there are any errors, rectify them and re-submit the form.
4. After which, a confirmation screen with all the data filled by the applicant will be displayed.
5. It is then the prerogative of the applicant to either edit or confirm the same.
6. On confirmation, an acknowledgment will be displayed. The acknowledgment will contain a unique 15-digit acknowledgment number.
7. The applicant is requested to save and print this acknowledgment.
8. ‘Individual’ applicants should affix a recent color photograph (size 3.5 cm x 2.5 cm) in the space provided in the acknowledgment. The photograph should not be stapled or clipped to the acknowledgment. (The clarity of image on PAN card will depend on the quality and clarity of photograph affixed on the acknowledgment).
9. Signature / Left Thumb Impression should only be within the box provided in the acknowledgment. In case of applicants other than ‘Individuals’, the authorized signatory shall sign the acknowledgment and affix the appropriate seal or stamp. The signature should not be on photograph. If there is any mark on photograph such that it hinders the clear visibility of the face of the applicant, the application will not be accepted.
10. Thumb Impression should be attested by a Magistrate or a Notary Public or a Gazetted Officer, under official seal and stamp.
11. If communication Address is within India

• The fee for processing PAN application is Rs.94.00 (Rs.85.00 + 10.3% service tax).
• Payment can be made either by
  • Demand Draft
  • Cheque
  • Credit Card / Debit Card

• If any of addresses i.e. office address or residential address is a foreign address, the payment can be made only by way of demand draft payable at Mumbai.

12. If communication Address is outside India

• The fee for processing PAN application is Rs.744.00[ (Application fee Rs.85.00 + Dispatch Charges Rs. 590.00) + 10.3% service tax].
• Payment can be made only by Demand Draft payable at Mumbai.
• At present the facility for dispatch of PAN cards outside India is available for a select list of countries. Applicants from other countries may contact NSDL at the contact details given in point (v) below.

This point is not applicable if applicant is providing the representative assesse details in the point no.14 of application form.
13. Demand draft and cheque should be drawn in favour of ‘NSDL – PAN’.
14. Demand draft shall be payable at Mumbai and the acknowledgment number should be mentioned on the reverse of the demand draft.
15. Applicants making payment by cheque shall deposit a local cheque (drawn on any bank) with any HDFC Bank branch across the country (except Dahej). The applicant shall mention NSDLPAN on the deposit slip. List of HDFC Bank Branches.
16. (Credit card / Debit card payment
Persons authorized to make Credit card / Debit card payment are as below:

• Category of Applicant   Payment by Credit Card / Debit Card can be made by / for
• Individual self, immediate family members (parents, spouse, children)
• HUF Karta of the HUF
• Company Any Director of the Company
• Firm Any Partner of the Firm
• Association of Person(s) / Body of Individuals / Association of Person(s) Trust / Artificial Juridical Person / Local Authority Authorized Signatory covered under section 140 of Income Tax Act, 1961
• Applicants making credit card / debit card payment will be charged an additional surcharge of Rs.5.00 by the bank providing payment gateway facility.
• On successful credit card / debit card payment acknowledgment will be displayed. Applicant shall save and print the acknowledgment and send to NSDL as mentioned in point (q) & (r) below.

17. The acknowledgment duly signed, affixed with photograph (in case of ‘Individuals’) along with Demand Draft, if any, and proof of identity (name in the application should be same as in the proof of identity) & proof of address (Individuals, HUFs, Body of Individuals, Association of Persons & Artificial Juridical Person should provide proof of address of residence stated in the application) as specified in the application form is to be sent to NSDL at ‘Income Tax PAN Services Unit, National Securities Depository Limited, 3rd floor, Sapphire Chambers, Near Baner Telephone Exchange, Baner, Pune – 411045′.
18. Super scribe the envelope with ‘APPLICATION FOR PAN – Acknowledgment Number’ (e.g. ‘APPLICATION FOR PAN – 881010100000097′).
19. Your acknowledgment, Demand Draft, if any, and proofs, should reach NSDL within 15 days from the date of online application.
20. Applications received with demand draft or cheque as mode of payment shall be processed only on receipt of relevant proofs and realization of payment.
21. For more information

• Call TIN Call Centre at 020 – 27218080; Fax: 020 – 27218081
• e-mail us at: tininfo@nsdl.co.in mailto:tininfo@nsdl.co.in
• SMS NSDLPAN <space> Acknowledgment No. & send to 57575 to obtain application status.
• Write to: INCOME TAX PAN SERVICES UNIT (Managed by National Securities Depository Limited), 3rd floor, Sapphire Chambers,  Near Baner Telephone Exchange, Baner, Pune – 411045

Best Reading:

• Permanent Account Number FAQ’s
• How to know PAN Card Status
• Who and why need PAN Card

As a conclusion, it would be easier for everyone to apply an online PAN card application once they know its basic information.  Well, to make it simple let us explain what a pan is once again:  As the name suggests, PAN is a Permanent Account Number, and does not change in your lifetime. It remains the same irrespective of any change in your contact details etc. You can have only one PAN Card and you can apply for a duplicate one if you lose it. But even then your number remains the same.  Moreover, it must be noted that, non-residents today can apply for a PAN Card and make the required payment online. It generally takes 20-30 days for a PAN Card to be made for non-residents. Please remember that if you DO NOT have a PAN, you are liable to pay a fine of Rs.10000 as per the Income Tax (IT) Department rules. Finally, you now also apply for a duplicate pan card in case you have lost your old pan. You can obtain a new pan card with the same old pan number. Also, while it’s true that only those who generate income out of India have to pay back to the Government in the form of taxes, it is advisable that non-residents too pay taxes. This shows the credibility of the client. Thus, it’s a must for all you non-residents to have a PAN. You may apply for a PAN through any PAN Assistance Brokers or your representative who could get a PAN Card made for you by visiting any such help center established by the IT Department. Hurry up now and apply for a new PAN Card!

Hi my dear avid readers!  It’s good to hear from you and it’s my pleasure to do your requests as long as I’m able.  Just lately, my email got flooded with questions from you: what an e-tax is and how to go about it.  So, with all my heart’s content and with so much joy to serve you, and give your requests, I’m writing the details about e-tax or is E-Filing of returns.  Enjoy reading my friends!

What is E-Filing of returns?
For sure you got pissed off and even hassled with the long lines in filing an income tax return.  Well, that those days are now over.  Thanks to the E-Filing of Income tax return.  You might wonder what this thing is. Well, E-Filing of tax returns means simply as filing your income tax return via the internet electronically.  This is very convenient, easy to do and a simple task that you can accomplish. e-Payment facilitates payment of direct taxes online by taxpayers. To avail of this facility the taxpayer is required to have a net-banking account with any of the Authorized Banks. Indian reader please read  instruction from NSDL for more detail.

These are the steps then that you should follow in filing an online income tax return:

1. Examine and carefully identify the necessary formswhich are suitable for you as an individual person.   If you are confused on which form you need to fill, details are available on the website. If you need help regarding which form to use, then check the website which is very much user-friendly and informative.
2. The next step is to download the return document and preparation software for your needed form from your computer.  Be sure that you identify the correct form.
3. Read and carefully answer or fill-up the downloaded income tax return form.  Double check or verify the said document for its correctness through the tools available in the website and then you make an XML file.
4. You should come up then with a a user id and password in your Income tax of India website
5. Next thing to do is to log in to the website by typing your user name and password in the sign in box.
6. Finally, you should then upload the XML file into the web page. After which, the successful upload takes place and the acknowledgment details will be displayed. You should now print the same document, check its correctness and then sign it using a pen manually. You should then send it via ordinary post within 30 days from the moment you filed the document to the office of Income Tax Bangalore. However, if you have a soft copy or digital specimen of your signature, then you may add that digital signature and then turn over yours aide-return.  Soon, a gratitude note follows which signals the end of your e-filing process. Keep then the acknowledged document for your records and future transactions.

If in case you need to pay your tax,you may also do an e-payment via the Income Tax website.  Likewise, you can also do it through your net banking account or with any of those authorized banks. An acknowledgment receipt which can be printed will come out afterward.

Here is some FAQ from https://incometaxindiaefiling.gov.in

Best Reading:

• Easy steps to Tax Filing
• Tax planning for first timer

In conclusion, E-Filing of your income tax return is something that you yourself should try due to its advantages namely: flexibility & convenience which in effect will truly save precious time for you; great accuracy; environmental friendly and the returns can be revised easily.

Hello friends some of our reader search about Income Tax Rates/ Slab 2009-10 on this website, I think it is necessary to show the information.
Here are new Tax rate after budjet Income Tax Rates/ Slab 2009-10
For the Assessment Year 2009-10

* No surcharge now before it was 10 percent of the total tax liability is applicable where the total income exceeds Rs 1,000,000.
Source: http://www.incometaxindia.gov.in/

During a “Tax Filing Day” people often forget documents, get stuck in the middle of a long line or even get tired of the crowd. If you won’t make it on time, you would be paying a liable penalty which is very frustrating.

There are easy step to follow so that Tax Filing would be like relaxing in your living room.

Maintain a log or a file of every income you make. Every income that is covered by Tax, in this way you will not have a hard time computing. Keeping track of what you are earning will save at least 10 percent of your time filing your tax.

While doing this, don’t forget to have everything documented. In every income that we are gaining it is always documented. Having a complete document of all of these files will be a big help.

Knowing what type of form you will need to file your tax should be MOTD of every individual who is tax filing. You will have a hard time asking and running around if you haven’t figured out which form to use for filing. A week or even a month before filing, you should already know which type of form you will have to use.

Being early during the day of filing is like starting a race even there are no go signals yet. Most of the tax filers are already prepared but is not on time. But if you are going to ask, What if the other tax filers are earlier than you? 10 to 30 persons ahead of you is not that bad. It means you are not going to wait for that long.

Just in case you will have to do some computation for yourself, it is recommended that you should do it as a group. In this way you will be sure that you are computing it the right way.

A lot of people love shortcuts. Inquiring or filing through online or “E-filing” is basically the shortcut of tax filing. This article is a good sample of online tax filing. Following these 10 easy steps will give you an upper hand when it comes to the toughest parts of tax filing.

Know what you need and what you should know. There are several things that you need in tax filing. Knowing these things before you go and file your tax is very important. In this way you don’t need to go back home for some documents of any other things that you need like Identification Cards (ID).

Where to go and what to do are 2 of the most important questions that you need to know. If you have the complete requirements but you don’t know where to go, you will never going to get somewhere.

Allow yourself to review everything before you go and file it. Double checking before filing will lessen your chances of having a bad day just because of Tax Filing. If you followed all the steps one by one, it is very eager to check again. It is better to be sure than sorry.

Lastly, just relax because everything is going to be alright. Everyone is filing and every person who has an income is doing this. Knowing these 10 easy steps is a plus on your side. You don’t have to worry about the stressful routine.

Quote of the Day
“Never go and attack in a battle if you don’t have any idea on how you are going to take them down and carry on with your plan.”

CONCLUSION:
The best way to anticipate things is know how to deal with things. Preparation is a big word when it comes to Tax Filing. If you are not prepared then be open to accept the consequences. Documents, Forms and other apparatuses should be prepared earlier. Being Early in everything is always a step ahead of everything. If you don’t want to be left behind, then try to prepare and be on the winning side.

Now date are close to file your income tax return before starting this article please read Income Tax Rates/ Slab 2008-09

Filling income tax returns before July 31 is obligatory for all individuals earning above1.5lakhs (women – Rs. 1.8 lakes and Rs. 2.25 lakes for senior citizens ) Most people do not know how to go about it but here are a few simple steps which will help you go about it

The following documents are required
Form 16: This is a certificate given by the employer about the tax deducted at source from the salary
Form 16 A: This is a certificate of deduction of tax at source to be collected from all the people who have deducted taxes while making payments to you like banks and companies
Summary Of Bank Accounts: This is a statement of all your income as well as expenditure and investments
Details of Property Owned: The Details of any property purchased during the year like rent received, municipal taxes paid, loan (if taken) details and interest paid is also required for filing tax returns
Sale purchase bills for documents/ investments: In case of large transactions it is better if each transaction of sale and the corresponding purchase is properly tabulated ant the corresponding profit or loss is arrived at for the correct calculation of taxable income
Details of tax paid: Details of any advance tax paid is required

The next step is the selection of the correct income tax form based on the nature of income

• ITR 1: Individuals who have income from Salary/interest/family pension/agricultural activities
• ITR 2: Individuals? HUF not having income on account of business/profession or on account of being a partner in a partnership firm
• ITR 3 : Individuals /HUF who are partners in partnership firms and do not carry out any separate business profession
• ITR 4 : Individuals /HUF carrying out business/ profession under a proprietary concern

The final step is filing the returns
The returns can be filed electronically by uploading the valid format of the respective ITR form (obtained from the Income Tax department site or other online tax preparation sites). After successful upload an electronic receipt will be generated… In case the form has your digital signature the electronic receipt can be kept for your records else it has to be signed to verify and acknowledge the electronic submission of the IT returns.

The returns can be filed physically by taking a print out of the ITR form and acknowledgment form and filing with the income tax officer

No documents need to be attached in either case

A penal interest @ of 1% per month of delay will be charged if the returns are filed after 31st July 2009 till 31 t march 2010 If filed after march 2010 a penalty of Rs. 5000 will also be charged apart from the fine
Paying tax is as important as filing tax returns hence to avoid any hassles it is necessary to file your returns before 31st July in case of individuals and 31st Oct in case of individuals who get their accounts audited

Filing of tax returns has never been easier thanks to the initiatives taken by the IT department.

Best Reading:

• What is Value Added Tax (VAT)
• How to know PAN Card Status
• Permanent Account Number FAQ’s
• Save Tax Through Investment

You have just set up your own business, and aside from the activities that need to be done to get everything up and running, you should also pay enough attention to the accounting side of your business.

The sooner you get this part organized, the sooner you will be able to concentrate on the business of making money.

The most difficult part about financial tax planning for new business owners is not knowing the terms, the rules, and the tax schedules. If you have no interest in this part of the business, then it would be better to hire a qualified and experienced accountant to set it up for you.

Of course, people with the credentials and experience will add an additional cost to your budget, but this is an expense well worth it.

On your own, you need to concentrate on the following areas as far as tax planning is concerned.

First, know what the rate for self-employed taxpayers are, as well as how the computations are done. In the United States, taxes that come from the self-employed are used mainly to cover for the Social Security and Medicare costs. This makes this a very serious income for the government.

If you are self-employed, there is a chance that you do not issue a paycheck to yourself. If this is the case, then you do not deduct any taxes from income earned on a regular basis. This tax can then grow to an amount that is harder to compute and pay. It would be a good idea to report your income on a monthly basis, and self-deduct, as well as pay the dues even if ahead of time. Make sure to keep a file of all payments made though, so that come tax season, you simply present proof of payment.

A business will have its own share of tax benefits which you should know about. For instance, your utilities, rental, luncheon business meals, even gas and transportation expenses can all be charged to the business. There is also the VAT input and output taxes, or sales tax on items purchased for the business. You just need to know the limit on how much you can charge to your business, and make sure to keep the official receipts on each expense you are charging to the business.

Another way to manage your taxes is to have a health care plan for the workers as well as for yourself. For the self-employed, you can get medical benefits for your entire family, provided the children are still dependents, and then you can deduct this expense up to 100%. Check to see what the requirements are for this benefit.

Tax planning is all about preparing early for that one month in a year when everyone is scrambling to fix their tax papers. If you plan and prepare ahead of time, you will never have to go through this kind of chaotic experience that is both harrowing and stressful.

Best Reading:

• Permanent Account Number FAQ’s
• How to know PAN Card Status
• Who and why need PAN Card
• Guidelines On Online Application For New PAN (Form 49A)

Quote of the Day:
Self-employed taxpayers who use the cash method of accounting have the most flexibility to maneuver at year-end. See a tax specialist for more information.

Conclusion:
Tax planning for the current year, if done properly, will set the course for your business in a way that is proper and full of direction. After all, a business is all about the bottom line.