TAX PLANNING: AN ESSENTIAL ELEMENT OF FINANCIAL PLANNING
Financial planning is considered to be most essential element of life. It has been rightly said that ‘Future is Uncertain’. Financial planning plays an important role in overcoming your financial uncertainties. Tax Planning is considered to be an essential part of Financial Planning.
A survey conducted by Rights Horizon among IT/ITES employees with the age group of 25-30 yrs. in major southern cities of India reveals that these employees are very poor in financial as well as in tax planning. The survey was conducted amongst 1169 salaried individuals in 3 cities viz. Bangalore, Chennai, Hyderabad. It found that nearly 70% of salaried individuals are not utilizing the Chapter VI A deductions (max. deduction available upto (INR) Rs. 1, 00,000/-) of Indian Income Tax Act 1962.
Chapter VI A (commonly known as sec. 80C) is an important sec in Income Tax Act which helps you to save taxes as well as money.
The study has found that many of them pay more income tax which could have been saved through financial & tax planning. In Chennai only 24% IT people completely used the Rs. 1 Lac limit. Nearly 58% people invested in Public Provident Funds/ National Saving Certificate while 35% in Equity Linked Saving Scheme (ELSS) & 12% in home loans. Most of the individuals have a habit of investing at the last moment of financial year when you are running out of your finances.
As no one can predict future we should be prepared for it. Every one should make a habit of saving right from the college days. Your investment portfolio & savings should be diversified so that it will maintain right balance between risks as well as earnings. To have a better and secure life consult your Financial Advisor, Chartered Accountant. For more contact us:
Mr. Vilas V Kulkarni
(Chartered Accountants),
259, IInd Floor, Bajaj Nagar,
Nagpur (India) 440025.
(M) +91 982 358 3667.
Mr. Harshal V Kulkarni
(Financial Consultant)
(M) +91 976 599 9467
No document (including TDS/TCS certificate, report of audit) should be
Circular No.6 /2008
F.No.142/02/2008-TPL
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
(Tax Policy and Legislation Division)
New Delhi, dated the 18th July, 2008
Subject : New Return Forms for the Assessment Year 2008-09 – and matters connected thereto – reg.
The Central Board of Direct Taxes, vide notification S.O.No.752(E) dated
28.3.2008 have notified return forms for the assessment year 2008-09. With a view to
enabling tax-payers to file returns in the electronic mode, these returns (except ITR-7)
have been made annexure-less. The instructions for filling up the return forms clearly
stipulate that “No document (including TDS/TCS certificate, report of audit) should be
attached to this form. Official receiving the return has been instructed to detach all
documents enclosed with this form and return the same to the assessee.”.
2. It has come to the notice of the Board that in spite of the directions contained in
the Instructions for filling the return forms, the practice of accepting returns, along with
annexures is still continuing. This practice goes against the expressed policy of the
Government and is not in consonance with the legal provisions. Therefore, it is
emphasized that Chief Commissioners of Income Tax must ensure strict compliance with
the provisions of law. It may be reiterated that all annexures accompanying the income
tax return forms should be detached and returned to the tax-payers by the receiving
official.
3. Further, while processing such returns under section 143(1), the credit for tax
deducted at source (TDS)/tax collected at source (TCS) shall be allowed on the basis of
details furnished in the relevant schedules of the return forms subject to Instruction
No.6/2008 dated 18
th June, 2008 issued by the Central Board of Direct Taxes in respect
of assessment year 2007-08 or any similar instructions as may be issued for assessment
year 2008-09. No disallowance of claim for TDS/TCS shall be made by the assessing
officer only on the ground that the TDS/TCS certificates have not been filed along with the
return of income or Form ITR-V. The same procedure shall also apply in respect of
challans relating to Advance Tax and Self Assessment Tax.
4. Assessees are advised to retain with themselves all annexures relating to
computation of income, TDS/TCS certificates, counterfoil of challans relating to payment
of advance tax and self assessment tax, audit reports and any other document which they
would have otherwise liked to file in support of their claims. The original documents and
certificates may be produced by them as and when called for by the assessing officer.
5. Instances have also come to the knowledge of the Board that ITR-V verification
form are being received without giving them a Receipt Number. Since ITR-V verification
form is an acknowledgement, the same should be received by giving a Return Receipt
Number, as if it were a return. Separate counters may be set-up to receive such ITR-V
verification forms. These ITR-V verification forms should be kept in safe custody.
(Sambit Tripathy)
Under Secretary to Govt. of India
Copy to
:-
i. All Chief Commissioners/Directors General of Income-tax with a request to circulate
amongst all officers in their regions/ charges
for strict compliance.
ii. Director General, National Academy of Direct Taxes, Nagpur
iii. Directors, Regional Training Institutes, Ahmedabad/ Bangalore/ Chandigarh/ Chennai/
Kolkata/ Lucknow/ Mumbai.
iv. Comptroller and Auditor General of India (40 copies)
v. Ministry of Law (10 copies)
vi. All Officers and technical sections in CBDT
vii. All Chambers of Commerce/Industry/Trade Associations.
(Sambit Tripathy)
Under Secretary to Govt. of India