2. 02
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INFORMATION
Make these 6 tax resolutions
for 2023 for long-term security
However, there are some resolutions, especially those related to tax, that one
cannot afford to ignore. The tax department is neither lenient when it comes
to deadlines, nor merciful when dealing with unpaid taxes. So, here are a few
tax promises that you should make to yourself.
Making new year resolu-
tions is an annual ritual
for many of us, but unfortu-
nately, most of these promises
to ourselves never get fulfilled.
However, there are some reso-
lutions, especially those related
to tax, that one cannot afford to
ignore. The tax department is
neither lenient when it comes
to deadlines, nor merciful
when dealing with unpaid
taxes. So, here are a few tax
promises that you should make
to yourself. These tax-related
new year resolutions will not
only ensure you don’t end up
with tax problems during the
year, but also bring peace of
mind and long-term security.
I will check my annual
information statement
(AIS) when filing tax
returns
The Annual Information
Statement (AIS) has details of
all the financial transactions
conducted by you during the
financial year. It will have
details of incomes (salary, pro-
fession, rent, interest and capi-
tal gains) as well as expenses
(foreign exchange, purchase of
gold above Rs.50,000 in cash
and Rs.2 lakh by card) and
investments (mutual funds,
stocks, bonds). It also has
details of the tax paid on your
behalf by your employer and
the TDS deducted by others.
Be sure to check your AIS and
verify if the details of your
financial transactions are cor-
rect.
I will verify my TDS
details in form 26AS
The Form 26AS is your tax
credit statement and has details
of the TDS deducted on your
behalf and the tax collected at
source (TCS) paid by you.
Access your Form 26AS either
through the income tax depart-
ment portal or through your
netbanking account and check
if the TDS and TCS deductions
are correctly mentioned in it. If
for some reason some TDS or
TCS has not been credited to
you, you must contact the
deductor immediately. A peri-
odic check of the Form 26AS
will ensure you are not running
around at the time of tax filing.
I will not ignore my for-
eign assets and earnings
Your tax compliance becomes
a little complicated if you have
foreign assets. All foreign bank
accounts, financial interests,
immovable property, accounts
in which an individual has
signing authority, and any
other capital asset held by the
individual outside India, must
be reported in the tax return,
irrespective of the total income
of the individual. Many tax-
payers omit this, but this is not
recommended. Not disclosing
foreign assets can invite seri-
ous charges under the Black
Money (Undisclosed Foreign
Income And Assets) and
Imposition of Tax Act, 2015.
Even if a return for a previous
year has been processed, cases
can be opened even up to 16
years later, and penalties can
be levied.
I will optimise my tax
by utilising all available
tax deductions
The Tax Optimizer from
Taxspanner helps people
understand how and where
they can save tax by utilising
the various available deduc-
tions. However, tax returns
indicate that many taxpayers
don’t fully use the deduction
limits under Section 80. Either
they are not aware of the tax
rules or don’t plan their invest-
ments well to avail the bene-
fits. This leads to unnecessary
outgo of tax on hard-earned
income. One must plan invest-
ments to claim the full benefit
of tax-saving options by up to
Rs.4-5 lakh as follows: Section
80C (max Rs.1.5 lakh), Section
80CCD(1b) (max Rs.50,000),
Section 80D (max Rs.75,000-
Rs.1 lakh) and Section 24 (max
Rs.2 lakh).
I will harvest long-term
capital gains from
stocks and equity funds
before 31 march
Stock markets have done very
well after the Covid scare. If
your stocks and equity funds
have gained during the year,
harvest up to Rs.1 lakh long-
term capital gains to lower
your future tax. Up to Rs.1
lakh long-term capital gains
from stocks and equityoriented
funds are tax-free in a financial
year. But you need to book
profits before 31 March to
pocket these. The same stocks
and equity funds can be bought
again, but their price of acqui-
sition for tax computation will
get reset at a higher level. Ask
your mutual fund house,
CAMS or Karvy for a capital
gains statement to know how
much capital gains need to be
harvested.
I will pay advance tax
on interest, dividends
and capital gains
A lot of taxpayers don’t report
their interest or dividend
income because they are under
the misconception that if tax
has been deducted, no more tax
is due. But tax deducted at
source (TDS) is only 10%,
while both interest and divi-
dends are taxed at the normal
rate applicable to the individ-
ual. Taxpayers in the higher
income brackets have to pay
more. If you have invested in
bonds, NSCs or bank deposits,
or have received dividends,
make sure you pay the tax on
these incomes by the due date.
All these incomes will show up
in your Annual Information
Statement (AIS), so there is
just no way you can escape the
liability. Also, keep in mind
that unpaid tax attracts a penal-
ty of 1% per month of delay.
Curtsey: https://economictimes.indiatimes.com/