Most taxpayers start sweating in January even in the chill of winter. That’s when they realise that it’s high time to kick-start tax planning. So, if you are among those who are wringing their hands, putting cold towels over their heads and trying to make sense of their financial planner’s advice, take comfort.
You are not alone!
But really, there’s no need to press the panic button. Tax planning changed dramatically after Section 80C superceded Section 88 of the Income Tax Act two years ago, removing the complex web of sub-limits for tax-saving investments. Tax planning can now be customised to fit financial needs. Instead of everybody being forced into a one-size-fits-all straitjacket, taxpayers can invest in options that suit them.
|3 crore Indians filed income tax returns in 2005-6|
|4.7crore PAN cards have been issued so far|
|30%rise in IT collections between 2004-5 and 2005-6|
|15%of income tax collected goes back as refund|
|2%of the tax returns filed are scrutinised|
The flip side is that freedom and choice also means confusion. Which tax saving option works for you? Should you invest in ELSS funds and benefit from the bull market? Or should you opt for the safety of PPF and NSCs? Is a ULIP a good idea? Or should you go for a pension plan?
MONEY TODAY partnered with tax expert Surya Bhatia and reached out to financial planners to answer these questions and develop strategies for different taxpayer-profiles. We bring you their advice, distilled and cleansed of jargon.
In return, we want just one commitment. Promise that you will start next year’s tax planning in April 2007 itself. Then you needn’t sweat next winter!