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People without health insurance have bad teeth and people without financial security have bad home. Starting from the 1st April 2006 and ending on 31 st March 2007, this current financial year in tune with the changing trends would cast lot of responsibilities on the individual tax paying public of India. Check-list of important do's and dont's for your better financial health is stated below in the article.
DOs 1. Do take care to ensure that you account for various items on big spending specially those, which are a part of Annual Information Return (e.g., investments in units of mutual fund, bonds or debentures, Initial Public Offering (IPO) of shares, bonds of Reserve Bank of India (RBI), expenditure through credit cards, cash deposit of specified amount in bank and investment in immovable property). 2. Do take care to submit form no. 15H being declaration by senior citizens to receive interest on Senior Citizens Scheme without tax deducting at source. 3. Revise your past income tax return if you find some left out income not previously shown in the original income tax return just by oversight. 4. Do invest in bank fixed deposit (FDs) for five year plus period so as to enjoy tax benefit by claiming deduction under section 80C. 5. Do prepare a chart to voluntarily make payment of advance tax by 15th September, 15 th December and 15th March. 6. Do invest quickly your money in terms of section 80C for tax deduction. The faster you invest the better prospects of not being subjected to the concept of EET (Exempt - Exempt - Tax) if at all it comes.7. If you do not possess a Permanent Account Number (PAN) card then do apply right now for allotment of a Permanent Account Number in form no. 49A. It will be impossible to enter into stock market transactions without a Permanent Account Number. 8. Do preserve proof of tax deducted at source. 9. Do remember to invest quickly your money in National Highways Authority of India (NHAI) or Rural Electrification Corporation Limited (REC) bonds in case you want to save your long-term capital gains. 10. Do make investment in certain Pension Funds (PF) upto Rs 1,00,000 to enjoy full tax deduction as per section 80CCC. However, this would be inclusive of tax deduction under section 80C (like Insurance, PF, Public Provident Fund, National Savings Certificate and so on). DONT'S 1. Do not unnecessarily deposit cash aggregating to Rs 10 lakh or more in a year in a Savings Bank Account or else your name would feature in the Annual Information Return (AIR). 2. Do not ever attempt to take cash loan of Rs 20,000 or more or else be ready to face a tax penalty equal to the loan amount. Likewise, do not repay loans or deposits by cash of Rs 20,000 or more. 3. Do not permit your friends and relatives to shop on your credit card, discount card or else it may become a problem for you because of AIR. 4. Do not file your income tax return even if you fulfill economic indicators but you have a gross income, which is below the exemption limit. 5. Do not dare to claim tax deduction in respect of your housing loan interest upto Rs 1,50,000 in case the house/apartment is still under construction. What the year may bring for tax payers? 1. During the financial year 2006-07, the tax-payers would be under fear in respect of big spending because it is expected that more and more new items would be coming in the ambit of Annual Information Return. 2. Quoting of Permanent Account Number may become compulsory in many new financial transactions. 3. Tax evaders would be nabbed as a result of information with the tax department collected through Annual Information Return. 4. Tax provisions for taxing the proceeds may come in the guise of implementing the concept of EET. 5. New Income Tax Act may be introduced making it a new learning process of new sections and the new law. 6. Existing income tax return form no. 2D may be scrapped and the details of expenses and investments may be made compulsory in the tax return. Subhash Lokhatia article from
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