If you are an earning individual or entity in India, you must have heard the name of Income Tax. This is the tax which is to be paid by individuals or entities to the government from a part of their income. The process of levying, administering, paying and recovering the income tax is being regulated by the Income Tax Act which was put to effect in 1961. As per the law, once an individual or business entity has an earning over a predefined slab, a portion of that earning (which could be in the form of salaries, wages, commissions, business earnings, investments etc), has to be given to the government in the form of income tax.
Exemption clause in the Act
The government of the country acknowledges that it could be real hard on the people’s part to shell out a part of their hard earned money in the form of tax. That is the reason the Income Tax Act has provisions of tax exemptions as well. Certain investments made by individuals, or business entities are being considered to reduce the overall earning of the individual, which helps in lowering that taxable income or eliminating the need to pay the tax.
Like everyone, you must also be looking for legitimate means to reduce the amount of tax that you pay to the government. To do this effectively and within the permissible grounds of the law, you need to stay updated with the various amendments and additions that are done to the Income Tax Act. There are various clauses in the Act, which will help you invest on channels which would be considered as legitimate investments and the government would give you exemptions for those investments.
There are as many as eight sections, where the government allows tax exemptions. These sections, 80C, 80D, 80DD, 80DDB, 80EE, 80G and 80GG contain a lot of information that needs to be known by the common man so that he may save on his hard-earned money himself, without even having to pay consultation fees to the income tax consultants who guide people on ways to save money the legitimate way.
Sign up for income tax newsletters
During the annual budget, the Finance Minister of the country declares the major amendments that are being made to the Income tax laws, which makes headlines on the newspapers. However, including you, crores of people are there, who do not get the chance to read the constitution and see the income tax rules(in original or amended) for themselves. It is thus wise to subscribe for newsletters that will keep you educated on the various news related to Income tax and will also show you legitimate path to invest so that you get exempted by the government.
Going through the newsletters would actually enlighten you with the various strategies that the government takes to arrest non-paying of taxes and the consequent actions against that. Being an honourable citizen of the country, it is obvious that you would want to adhere by the law and hence you need to keep yourself posted with this information.