Taxed!

TAX - the most dreaded three letter word. Something which eats into your hard earned money.

The first basic understanding that we get about taxes are that they are paid for the betterment of our lives administered by the government. So everyone has in some way abide by the law. While some become evaders others avoid paying taxes. But for the salaried class there is no escape. So it’s better to understand how taxes work, how to minimize it so that you can be free from the hands of the IT department.

Now, I am going to introduce you to road tax , because I guess this is the time most of you are keen to get two or four wheelers. Those people who already hit the roads with their machine might already have given some bucks away in the form of motor vehicle tax or simply road tax. The road tax is collected on "life basis" , the tax is for 10 years or a "fitness period" of 15 years. After that you have to again get your vehicle re-registered and pay another amount.

Vehicle taxes for the upper-end , luxury cars may even run into lakhs of rupees. Now to say about the dirty game. The vehicle tax is supposed to be based on the ex-factory manufacturing cost plus the excise duty , sales tax/vat. But what is really happening is you are taxed at the ex-showroom cost, which are higher --- dirty game between manufacturers and some big players. Only a part of what you pay go to the RTO , the rest is pocketed by some unknown powerful men.

This brings into mind the famous episode of the controversial taxing of Sachin's new Ferrari 360 Modena . Though the car was a gift to sachin, he still has to dole out a huge sum in the form of customs duty, road tax and other misc. taxes. The case is still on.