De-Taxed!

This blog takes you through some fine details on tax-payment now that you have started earning!

Your long awaited wish comes true.........standing on your own feet.........earning by your own.............and now u enjoy the freedom to spend as you like.

You were promisesd by your company that they will pay you a certain amount. Just when you thought you were going to get that amount , u are mistaken. you think your company has cheated you...they pay you what is less than what they promised when they offered you the job. now you hear about a lot of finance terminologies namely PPF, NSC, medical insurance, HRA, etc....and claims that eats up into your income.

Relax! this is all part of the business. Your company has to provide the details of its finance to the IT department. In the process, u as part of your company , are also being counted as a tax payee to the government. as a result u will be paying a certain amount as tax to the government and this is called the TDS or the tax deducted at source. the TDS covers the whole tax amount which you will be paying as a regular employee earning a certain sum.

If you have only a single source of income , and that's your salary, then your tax as TDS is already paid by your company. In the next financial year , you will have to file your return for the previous year. Filing your return simply defines how much and by what way you have earned your income, through different means. it is like your balance sheet. Filing your return promises you to get a PAN and from then on your tax details will be filed with this number.

If you earn an income from some other means....say by shares, on some capital, interests,etc. then you will have to mention them in your return and also will have to pay an extra amount if it is taxable. And if you have given away certain amount as donations in the form of charity , u may be eligible for a tax deduction, in which case u r entitled to get back a certain amount .

The Permanent Account Number (PAN) is an all India, UNIQUE TAXPAYER ID. PAN is a ten-digit alphanumeric number, issued in the form of a laminated card, by an Assessing Officer of the Income Tax Department. A typical PAN is AMRPP1595D.

PPF – Public Provident Fund – The Provident Fund is a retirement benefit scheme , under which a stipulated sum is deducted from the salary of the employee as her contribution towards the fund. The contributions of the employer and the employee are then invested in government securities. The interest earned on these securities is credited to the Provident Fund account.

See that you pay your taxes on time!

Please post your valuable opinions !