Simple Steps To Make Your Tax Filing Easier
There is a saying 'The only two constants in life are death and taxes'
it is a funny one, but true nevertheless.
This hub is to try and help you make the process of paying for taxes easier and smoother.
- Know The Tax Bracket You Fall Under - different income groups, fall under different tax brackets or tax slabs. You pay tax according to your income level (a percentage of your income is taken as tax). Knowing your slab will give you a good idea on what you may have to eventually pay at the end of the year.
- Be Aware if you are expected to pay Advance Tax - In India for e.g. you may have to pay advance tax if your yearly income is expected to cross 1 million rupees. Being aware of this will help you plan better.
- Be Aware if you are expected to pay sales / service tax etc. People who are earning only from salaries will not be required to pay this, but if you are a professional or a trader you will have to. Find out and be aware of what this could potentially be.
- Keep a detailed record of Income & Expenses. for salaried individuals it may not be that important if you in the moderate slab, but at the higher end, all expenses above 25 thousand may be tracked by the Tax authorities and hence it is a good idea to keep your paper trail in order.
- Insist on bills - as mentioned earlier, traders are expected to pay service tax and collect service tax. there are now more than 200+ services under this net including dry-cleaning and hence you should insist on bills. The service tax you pay is deductible from your income.
- remember for salaried class - you pay taxes on all income, but for professionals or firms you pay taxes only on residual income - which is income minus expenses. hence the need to keep records of all your expenses.
- Ask for service tax certificates from all your customers, banks and lending institutions. this will again be required to process your claims and your form.
- Use E-Filing. It is immediate, with no loss of data and secure. You get your own login and password and can go back to check all your updated records.
- Use a software - tally is around, but you can also use the many free software on the net. Some sites allow you to automatically track your spends, EMI payments, etc on the portal, giving you a very easy tax freindly statement at the end of the year.
- Save for your tax regularly. You are allowed exemptions on your savings and you must look at making the most of these.
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