Smart taxpayers know the importance of obtaining the latest tax related updates and advice and they also know how to use it to pay less tax. The right tax advice can help an individual pay less tax, get him a larger refund and accomplish other financial goals. The tax payer can find enough free tax advice, help and planning information and tax tips from a number of sources against a specified payment.
Proper tax planning can reduce the financial burden on the tax-payer’s assets since effective use of tax relief and breaks, exemptions, allowances and tax planning methods can enhance the benefit of the investment strategy and the use of non taxable vehicles to enhance fund growth. Tax planning is a basic duty of every individual, whether one has a job or his own small business, there's free tax advice available to help the tax-payer pay less tax. Broadly, there are three steps in the tax planning exercise and these three steps in tax planning are:
- Calculation of taxable income under all heads i.e., Income from Salary, House Property, Business & Profession, Capital Gains and Income from Other Sources
- Calculation of tax payable on gross taxable income for the whole financial year by using a simple tax rate table
- Calculation of tax payable on gross taxable income for the whole financial year by using a simple tax rate table
After calculation of the amount of tax liability there are two options to choose from:
- Pay the tax upfront without utilizing tax planning vehicles
- Try and minimize the tax through prudent tax planning
There is a number of tax incentives provided by the Government that the tax-payer can avail of. Through prudent tax planning not only is the income-tax liability reduced but also a number of highly safe Government backed savings schemes become a source of future financial security. Therefore tax-payers taking advantage of tax exemptions must ensure the highest possible post-tax yield keeping in view the basic parameters of safety and liquidity.
Sound tax advice normally considers the tax-payer’s financial and personal circumstances in order to ensure that it is relevant to their overall needs. Such advice considers the needs of an individual bearing in mind the three major taxes (income tax, inheritance tax and capital gains tax) within the context of their personal and commercial circumstances. Thereafter appropriate and flexible strategies that can be easily adapted to meet and implement individual plans are developed.