TAXE >>

February is the month to remind you that March is next! and March is to remind you that nothing is left!

In the context of Income Tax planning for the Financial Year 2009-10, February and March are the last chances to do your bit to save the tax bite!

Most of the Salaried Employees would have received the Investment Declaration forms to be filled and submitted. Others who do not get this kind of reminder, better beware now!

Certain Do’s:

• Do invest to the maximum of Rs.1,00,000/- under section 80C. Please exhaust the limit in your best interest.  By this you make certain savings for yourself and also save tax also…. which means double thrift.
• Do also check out the precautions to take… (Caution Note to 80C Deductions)
• Do pay your mediclaim premiums also within march… to claim u/s 80D of Income Tax Act
• For those in business — If you are planning to buy certain vehicles or fixed assets, feb and march are the best months to buy. Why? Because using the asset for one or two months before march end, will get you depreciation for whole 6 months!!!
• For those in business — If you are liable to deduct and remit tax at source (TDS) then better deduct and remit all the TDS relating to the period from April to February within 31st March. OR ELSE, the expenditure amount subject to TDS will be disallowed. Also do not forget PF/ESI dues… becuase they also warrant disallowances due to delay in payment.

Do Check out the Budget for next Financial Year which will be announced in Feb end.

• Do consult your tax doctor i.e. your Tax consultant or your Chartered Accountant.
  

Certain Dont’s:

• Do not submit fake rent receipts or rental agreements for getting HRA exemptions, Do not submit fake medical bills for getting medical reimbursement exemption

Don’t Invest for the sake of Tax Savings — Check out your liquidity requirements and THEN ONLY should you save for tax purposes.  Remember: Savings, Investment and Business should be guided on merits and not dictated by Tax Laws.


Don’t fall prey to Mutual Funds which claim as though they are tax planners and Investment managers for you. They silently add the danger disclaimer that “MUTUAL FUNDS ARE SUBJECT TO MARKET RISKS”. You know the market right! In-fact no-one knows the market. One day it touches sky, another day it sinks deep into the sea. What happens in the midst of this is that you are no-where!!!

• Do not consult your friends and colleagues for tax-planning. Consult only your tax consultant or chartered accountant. Remember: Crocin is neither for ‘all fevers’ nor for ‘all patients’.

There may be others to add to the list of dos and donts.  I’ll do it whenever those strike me. You may also comment if something can be added.

- TAXE