Tax Relief!

The proposal announced by the Union Budget which will eventually fall in place step by step claims that small salaried taxpayers will be exempted from filing returns. This is likely to be extended to a large majority, both in government and private jobs.

Sources say the scheme is likely to first cover those with taxable income of up to Rs 500,000 in a financial year.

The scheme was proposed two years ago but could not be operationalised as many companies were not filing information on TDS online.

The scheme, likely to be introduced from June 1, will benefit over five million taxpayers.

Officials said initially, only bank interest income would be covered, but capital gains and income from property could be included later.

They said the government would have the option of asking a person to file his return if the information given in his tax deducted at source certificate did not match the details in his annual information report (which has information about a taxpayer's high-value transactions).

Officials say over 90 % companies now use the online platform.

In case of salaried taxpayers, the employer deducts tax from employees and pays to the Income Tax department. The process will also ease the burden on the revenue department.

Source: http://www.rediff.com/business/

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Few alternative saving method which will work for you!

Increasing tax burden for high earners is expected to prompt wealthy individuals to seek alternative ways to save money without getting taxed. For all those who want to put, more aside for retirement, here are few alternative

• The most popular way to save money is by individual saving account, where in one can keep on parking his extra earning in your saving account which can earn a little interest prior not withdrawing unless faced any crisis.

• Maximum Investment plan are the another alternative investment plan which will help in saving simultaneously investing in different equity linked products.

• Venture capital Trusts also offers worthwhile tax breaks. Investors receive heavy Income Tax relief on contribution with venture capital trust.

• Enterprise Investment Schemes are similar to VCTs in that they typically invest in early stage companies. The main benefit is that there is no capital gains tax to pay, capital losses may be offset against other gains.

• Offshore bonds also offer a potential tax saving for higher and top rate tax payer. The investment bond can grow offshore without tax being deducted. They can also draw up to 5 per cent of the original investment each year and defer any tax owed on the income until encashment. Advisors say the bonds make sense for people who will be in a lower income tax band at retirement.

Source : Financial times