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How
to handle your
FIRST JOB?
Now that you've entered
the full-time workforce, you'll enjoy getting steady paychecks,
and so will your partner the Income tax department. Becoming
a employee means becoming a taxpayer, too. Taxes consume upto
30% of your earnings and hence it makes sense to plan in advance
to make the most of your earnings. |
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1.
Sign up a PAN Card
Get in touch
with a tax consultant to help you out with a PAN Card.
You can also make an online application by logging into
https://tin.tin.nsdl.com/pan/index.html . However we
suggest that you take professional help, so that he
would do the follow up for you.
2. Know your
Tax Rates
You'll owe income
taxes at rates that range at 0% for the first 1,10,000/-
Rupees. Those limits increase to 10% and 20%, respectively,
for Income ranges between 1,10,000-1,50,000 and 1,50,000-2,50,000.
Thereafter tax rates are 30%. Remember taxpaying is
not all a one-way traffic. There are ways to save, too.
3. Fix an
appointment with a Tax Professional
Visit your tax
professional and chat with him and explain your tax
situation. pick an appointment . Make sure you read
the tax preparation checklist before you visit him.
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4. Plan your Taxes in Advance
This is something
most workers—whether on their first job or 20th—fail to do.
We know that because nearly 30% of taxpayers apply for tax
refunds every year, proof positive that they had too much
withheld from their pay. When you start a job, its most probable
that you'll be asked to fill out a Tax planning sheet. That
little piece of paper controls how much income tax will be
taken out of each paycheck for the Income Tax. The amount
is based on how your salary and the structure of allowances
and perquisites. Take the time to discuss your salary structure
carefully with your Tax professional to be sure you claim
as many allowances as possible. That will bring your tax deductions
to the minimum.
5. Take advantage
Tax saving Investments
Based on your Income,
your tax professional may suggest that you sign up for an
insurance scheme or a tax shield mutual fund. Carefully plan
your cash flows and sign up for a Systematic Investment Plan
well in Advance
6. Enjoy Tax-free
fringes
Fringe benefits often
deliver double benefits. Not only does your employer foot
all or part of the cost, but the value of most of these benefits
comes to you tax-free. Even when the value is included in
your taxable income, you come out ahead.
Among the tax-free fringes you may be offered:
- Free Telephone
- Group term life insurance.
- Free Refreshments in the office
- Company car
- Employee discounts on your company's goods and services.
7. Maximize
Stock options
The chance to buy company stock at a discount can be a great
benefit. These stocks provide a great tax saving option. Make
sure you discuss the tax implications of the stock options
with your Tax Professional.
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