For too many years now, tax planning and financial planning were treated as two distinct entities. The former was an annual ritual to be completed in a rush before the end of March, while the latter was a more holistic exercise.
Unfortunately, most of us are victims of history and continue to treat tax savings as something entirely different from financial planning. We know that this is a self defeating exercise, but when March is upon us, we rush to the most easily accessible tax- savings option, no matter how unfit it is to be part of our regular financial plan.
We’ve said it before and we’ll say it again: plan in advance and you not only save on stress, you make more money. The new tax forms, coupled with new initiatives by the tax department, should help.
Though they look far more cumbersome than the single-sheet Saral, the new forms are actually easy to fill and file. You can choose to get a tax return preparer to calculate and file your return or you can do it entirely on your own and file online. So filing returns need not be the chore it once was.
But though the forms have changed, the laws and rules remain the same, making tax compliance a nuisance. That’s something R Prasad, chairman of the Central Board of Direct Taxes, admits. “The whole process of compliance just now is very tedious,” he says. “We have to make it simpler. We are trying to do that.”
Of course, change will not happen overnight. There are innumerable problems faced by taxpayers at every stage of filing returns and, sometimes, even after. There are grievance redressal mechanisms available online and offline, and we show you where to go when you need help.
And running through this entire presentation is our firm belief that in order to truly improve efficiency, it’s important to have a firm grasp of the basics. Once the foundation is in place, you can make elaborate tax-saving plans without ending up in deep trouble with the income tax authorities.