Tax is a word or must say a phenomenon which at one time or the other has given shock waves to all. However, a proper planning of the same can land you in a rich soup of esteemed self financial satisfaction. As we all have to pay income tax to the government on various things, there are various tax planning strategies that one can use.
Firstly, you have to learn what the word “tax” actually means. The word tax has been derived from the Latin word, tax which means to impose a financial charge in the physical form of money or other levy upon a tax payer by a state or the functional equivalent of a state such that the failure to pay the same is punishable as per the prescribed law.
Types of Taxes In India
• Income Tax
• Sales Tax
• VAT
• Income tax: An income tax is a charge levied on the income of individual or institutions. Different kind of income taxes exists and can be progressive, proportional and regressive.
• Sales Tax: A sales tax is a tax charged at the point of purchase for definite goods and services.
• VAT: VAT is a similar tax like sales tax, the only difference being it's a tax on the estimated market value added to a material or product at each of its manufacture or logistics, ultimately passed on to the customers. A 12% VAT is presently calculated in India
Tax Planning of the year
It has been seen that numerous people end up reacting to tax at the end of a financial year rather than looking at as an investment which must be considered throughout the year around. There are some key points that are mentioned below to help you in planning your income tax:
Insurance: Have you considered insurance as they are covered under section 80C? Taking insurance would profit you at the end of a year as they are exempted from tax clutches.
Mutual funds and equity: Mutual funds and equity plans are very popular way to plan up your tax mode nowadays as they are offered by insurance companies and the same offers a tax benefit under the preferred section of 80C. To be specific, investing in the equity will automatically double up as mutual funds and life insurance.
Look-at the post tax returns: One must list out the goals one is saving for. Doing this would mean giving you an insight of better perception of how much you need and when and how much risk would be taken. Once you are done with doing this crucial step, you can easily plan your tax planning for the year.
The trick to invest sharply and smartly or boosting for good returns lies in a combination of debt, equity and real estate. These are also applicable, if you want to make the most of post-tax income.
Investment in the global market: The way the stocks are moving internationally and investors making hay at the perspective shining markets of China, Brazil & India, the term, emerging market looks understated. Thus, buying mutual funds from these countries saw inflows of USD 4.9 billion during 2009 & 2010, so invest in these and avail higher yielding results at the end of a financial year. Here, are the three steps that guide you to the fruitful forest of investment in the global market:
• Determine the right amount of foreign exposure
• Spread your money around the globe
• Boost potential gains by spicing up the mix of investments
Last but, not the least; one must also keep a track record of the stock exchange every now and then and not to forget the very investment in all of the above mentioned financial weapons. One must make investment in the global market, which will help you reap returns and plan your tax benefits, for longer terms.
Firstly, you have to learn what the word “tax” actually means. The word tax has been derived from the Latin word, tax which means to impose a financial charge in the physical form of money or other levy upon a tax payer by a state or the functional equivalent of a state such that the failure to pay the same is punishable as per the prescribed law.
Types of Taxes In India
• Income Tax
• Sales Tax
• VAT
• Income tax: An income tax is a charge levied on the income of individual or institutions. Different kind of income taxes exists and can be progressive, proportional and regressive.
• Sales Tax: A sales tax is a tax charged at the point of purchase for definite goods and services.
• VAT: VAT is a similar tax like sales tax, the only difference being it's a tax on the estimated market value added to a material or product at each of its manufacture or logistics, ultimately passed on to the customers. A 12% VAT is presently calculated in India
Tax Planning of the year
It has been seen that numerous people end up reacting to tax at the end of a financial year rather than looking at as an investment which must be considered throughout the year around. There are some key points that are mentioned below to help you in planning your income tax:
Insurance: Have you considered insurance as they are covered under section 80C? Taking insurance would profit you at the end of a year as they are exempted from tax clutches.
Mutual funds and equity: Mutual funds and equity plans are very popular way to plan up your tax mode nowadays as they are offered by insurance companies and the same offers a tax benefit under the preferred section of 80C. To be specific, investing in the equity will automatically double up as mutual funds and life insurance.
Look-at the post tax returns: One must list out the goals one is saving for. Doing this would mean giving you an insight of better perception of how much you need and when and how much risk would be taken. Once you are done with doing this crucial step, you can easily plan your tax planning for the year.
The trick to invest sharply and smartly or boosting for good returns lies in a combination of debt, equity and real estate. These are also applicable, if you want to make the most of post-tax income.
Investment in the global market: The way the stocks are moving internationally and investors making hay at the perspective shining markets of China, Brazil & India, the term, emerging market looks understated. Thus, buying mutual funds from these countries saw inflows of USD 4.9 billion during 2009 & 2010, so invest in these and avail higher yielding results at the end of a financial year. Here, are the three steps that guide you to the fruitful forest of investment in the global market:
• Determine the right amount of foreign exposure
• Spread your money around the globe
• Boost potential gains by spicing up the mix of investments
Last but, not the least; one must also keep a track record of the stock exchange every now and then and not to forget the very investment in all of the above mentioned financial weapons. One must make investment in the global market, which will help you reap returns and plan your tax benefits, for longer terms.
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