The Central Board of Direct Taxes (CBDT) has decided to honour the regular and the sincere taxpayers by sending them a letter of recommendation. While most of the people will come under this category what is essential for every tax payer is to make sure that they are doing the right thing in their entire tax filing process. This is essential so that they are always compliant with the situations and the regulations that are applicable for them and this will also make sure that there are no surprises at some later stage.
Here are some of the ways in which an individual can make sure that they are getting their tax process in proper order.
List all income
One of the most common ways in which things go wrong is that while calculating the tax items and some of it are missed out. The tax calculation requires special attention where many investments incomes are accumulated and is not paid immediately. In such a situation, there is no entry of the bank entry for that particular income this should not be considered in the workings and this will lead to a wrong picture appearing about the entire tax calculations. This even arises many queries from the income tax department at a later date as they ask for details about the income. At the time of questioning, if it comes out that this income has not been shown then it seems like the amount has been hidden from the tax authorities. It is essential for every individual to work on the details of the various incomes that they have earned during the year so that at the time of filing their return, there is a complete picture that is available. Often the effort of keeping a record starts at the last minute and this also becomes a reason why there are several details that are being missed out.
Small is important
On many occasions the individuals do not give importance to minor things and figures that crop up for them and they turn to ignore it. As far as tax, this can be a big mistake because it will mean that the person is hiding the income and not showing it for the purpose of taxation. In some cases even the small amount can lead to large importance for the individual and hence there is nothing that should be avoided. The individual requires to pay the required attention to all the aspects of their finances and even a small income that arises should be shown and not should be kept away. The thought that the tax department will not bother them since this is a small figure should be ejected as this can lead to a long and costly impact later on.
The biggest mistake that many people make is to ignore the communication from the income tax department. Just because one does not agree with the details that does not mean the communication should be ignored. This is not going to solve the problem but instead this will lead to bigger problems. If there is no reply that is received from the individual then the tax department will moves a step ahead and take action on its own. This can lead to a huge demand piling up or it can lead to some refund not coming through because this has been adjusted against the demand that has been made and thus this can affect the taxpayer. It is going to be even more difficult to solve the issue that has been taken by the income tax department. So it is better to reply to notices and other details and make sure that the actual situation is brought out in a proper manner.
Tax Assist is a professional income tax consultancy in India for both corporate houses and individual tax payers; the latter comprising Salaried Individuals, Seafarers, Professionals and Non Resident Indians.
With the help of Tax Assist and its team of income tax professionals, taxpayers can minimize their Income Tax liability, maximize their net income and create opportunities to save for current and future needs while maintaining proper accounting standards and income tax returns which are compliant with the Law.
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