Are your Ready for Income Tax 2012-13.
Once the festivities of welcoming New Year are over, January becomes a painful month for most people who are salaried. As a lot of employees in BPO companies are new and this could be their first year of generating income they are not well versed with the income tax laws and provisions.
A lot of us keep on ignoring the mails from HR and/ or Finance to submit proof of investment and rent etc. and then when the tax is deducted in the January Salary we get a rude shock.
This week should be the last week in most cases when you can submit the proof for your investments and other tax saving instruments to your company.
Here are the steps to follow
- Find out your salary (Not kidding a lot of first time salary earners have no idea what is taxable and what is not taxable in their salary).
- You need not read further if your net income is less than 2Lakhs as income till 2 Lakhs is exempt from Income tax. If you are a senior citizen and reading this blog then your income up to 2.5 Lakhs is exempt from Income tax. Check here for your income tax slab.
- In most cases your company will have either an internal or external salary portal that will give you access to your Tax details go please log in to that to find your tax liability.
- Go online and check tax deducted till date. You can check it here by going on this link. You will need user ID and password. Or if you have online banking for banks like HDFC, ICICI, Axis, SBI etc. their website will also give you a link
- Now that you know what is your tax liability and how much tax has been deducted you will need to provide proof of investments photocopy attached in a prescribe form that your company would have circulated.
- Once you have submitted the proofs to the payroll team of your company, check your pay slip at the end of month to ensure no extra tax has been deducted, as human errors are always possible.
Given below are some of the investments that can help you save tax
- Most Insurance policies both LIC and other private companies
- Rent paid to landlord by check. Remember your parents can be your landlord but not your husband or wife.
- Principal up to 20K and interest up to 1.5Lakh in case of a self occupied property.
- Some specific Fixed Deposits with banks
- Tax saving Mutual funds.
- National Savings certificate
- Public Provident fund
So dear reader if you have been ignoring your tax planning for the financial year 2012-13 this is high time you put your house in order get in touch with your payroll team and follow these basic steps.
Also please remember these are some very basic steps for detailed financial planning you should consult a certified financial planner or your tax consultant.
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Arrow picture by: Brian Talbot