We are morally bound to pay taxes, legally too. It is for the betterment of our own nation. The taxes we pay help the country develop and prosper, which is definitely good for the society at large. But let’s be honest here- we hate paying taxes! After all, they are a chunk out of our hard-earned money. An even more terrible feeling is when you have to pay additional penalties on your tax. Nobody likes the sound of that, definitely! But still, a lot of people end up losing more money due to penalties.
For those of you who can’t seem to manage your tax saving, and find yourself under the added burden of tax penalties more times than not, we bring to you some easy tips to avoid extra losses when dealing with your Income Tax.
Sounds simple enough! Still, an astonishingly high number of people fail to do so. If you don’t pay your tax within the due date, a penal interest is levied on your net payable tax; interest varies under different conditions but is usually 1% per month. There is an additional penal interest for delay in filing return under Section 234A. These penalties are a significant blow to any of your plans to save money. Luckily, they can be easily avoided if you just pay your taxes on time. Be particular about your payments, keep an eye on the deadlines, and that’s it; nothing can put a dent in your tax saving now!
2. NEVER Conceal or Falsify your income
It might look like a bright idea to reduce payable tax by concealing your income, it is NOT! Such things never stay hidden and when it does come to light, it will cost you big. How big? A penalty for such an instance is anywhere from 50% to 200% of the tax evaded or thought to be evaded as seen fit by the income tax authorities. Rather than exposing yourself to such risks, both financial and legal, you can easily follow the mantra of SIP- Save, Invest Prosper, and try out various plans and funds to increase your visible savings. There is an easy-to-use and really effective Mutual Funds Investment App out there to help you along!
Always be up-to-date with any and all twitches and reforms in tax policies. Being alert about tweaks in governmental policies will allow you to always be prepared to deal with the aftermath. One such example is the implementation of the GST Bill on July 1st last year. People who followed the news and kept updating themselves in the regard are better equipped to deal with the changes brought around by it. Such an attitude is sure to help you Axe Tax like a pro! It also helps you in keeping track of important dates and deadlines. For all those who haven’t filed their tax returns already, the last date is 31st July. See what I mean!
There are a huge number of penalties that can be incurred simply because of failure to co-operate or non-compliance with the tax authorities and orders issued by them. The authorities at any time might require answers to important questions or issue a summons for your attendance regarding a serious matter. You might have to simply sign a few statements or give clear explanations for any discrepancy flagged by them. A single instance of non-compliance to such a notice could subject you to a penalty of up to Rs. 10,000. They can also levy a penalty of up to Rs. 50,000 if you knowingly file an inaccurate statement of your finances. So hiding facts and non-compliance with official notices might not be a great money saving idea.
It is simply amazing how easy it has become to manage your finances while sitting in your cushy chair at home. Viewing your account statements on your phone, carrying out transactions or saving with a fun Mutual Funds Investment App; all is literally at your fingertips! You can take advantage of this and simplify the whole process of doing taxes. There are several apps and websites that can help you keep a track of your financial statements and also notify you about important dates or any new reform in policies. Sqrrl is one such amazing app that can help you keep a tab on your savings and investments; with its Axe Tax feature you can manage your tax saving and see it grow.
We really do hope that all these tips and advice will help you stay away from tax penalties in the future so you don’t lose out on more of your savings. Keep an eye out for the due dates, follow the guidelines and just like that, doing taxes should be a breeze this time around. We also recommend you to start using Sqrrl and save money like a pro!
(The author can be reached at [email protected])
(Republished with Amendments)