To do and avoid things while planning your Income Taxes
To do things while Planning your taxes:
- Taxes should be planned at beginning (April) of the year and not at the end of year (March).
- Tax planning is not one time job, its continues process, with every incoming source of income comes the tax planning part.
- Consult a tax practitionar if you dont understand it.
- Income Tax department keeps an eye on all your transaction, your PAN is their key tool to locate your transactions.
- Income tax department knows how many bank accounts you have, transactions and spendings.
- Plan and pay taxes on time to avoid unnecessary tensions.
Things to Avoid while planning your Taxes:
- Tax planning is different from Tax avoiding.
- Follow what Income Tax Act 1961 and rules says and not assumptions that you make.
- Dont think that you can fool income tax department, they are smarter after everything gooing online.
- Avoid taking consultancy from someone who is expert in handling the cases through bribes only.
- AUDITORS AND CHARTERED ACCOUNTANTS ARE NOT SAME. Auditor can be anyone, chartered accountants are qualified professionals from Institute of Chartered Accountants of India (ICAI), and are capable of handling all your Tax part.
- Never think that by outsourcing you services you can just relax, your consultants will never know what is in your mind. Tell them your full financial health and condition, so they workout on your behalf accordingly.
Really a good post.
Taxes should not be avoided by illegal methods but should be properly planned.
And rightly said Income Tax departments have full data of each and every person. But they will catch you at right time.
Many people ask why Income Tax Department is not issuing notices to many defaulters and how people easily escape after doing fraud?
The reason could be:
- Insufficient Staff: India has population and staff at department is not in proportion to that.
- Chance to Assessee: Sometime department gives time to assessees to file the return and pay tax, but after a reasonable time limit department does take action.