• How and when TDS Deductions can be avoided

    Even though many of us are familiar with tax filing, the process of TDS deduction is still confusing for many. When and where TDS is applicable, what are the procedures to reduce it and how to claim the deducted amount at the time of filing tax returns are few of the queries we have. So, here we discuss TDS deductions with a focus on how and when it can be reduced to help you in everyday life.

    Understanding TDS:

    The Indian tax structure is broadly a two dimensional approach towards payment of tax liabilities. In the first method- self assessment, taxes can be paid voluntarily after evaluation of income during a financial year. In the second method, Tax Deductions at

    Source or TDS, as the name suggests, is the spot deduction of tax from the income source itself, at the time of earning. This is to simplify the taxation procedure for the government and to ensure that the payment making and receiving individual / company is accounting the same without fail.

    TDS is applicable for earnings

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  • EMIs in Credit Card dues

    EMI is a common household term today, as more and more people are availing different kinds of credits to meet their financial needs. The same is applicable to outstanding amounts in credit card dues which the customer may find difficult to pay in one go. Is the EMI facility on credit card payments a good option or does it come with strings attached? Let's first understand what EMIs in credit cards are.

    When you make a purchase using your credit card, you can make its payment by any of the following ways:

    • Make the full payment of the card on the due date
    • Make a part payment and pay interest on the unpaid amount till it is repaid
    • Pay the outstanding amount in EMI

    The third option is when the amount can be paid back to the credit card company in equal parts. EMI in credit card dues thus works like a loan, wherein you pay off the outstanding amount equally during the pre-decided tenure.

    The card issuer usually specifies the conditions that only specific purchases of certain

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  • Is a home saver loan an option for existing borrowers?

    Victor has taken a home loan of around 25 lakhs. He is regularly paying the EMI. Despite interest rate increases and rising inflation, Victor never defaulted. His savings reduced drastically because of increase in EMI. On top of that he had paid off a lump sum amount of Rs.5L as part of his prepayment to help him ease off the strain on his monthly budget with the consecutive hikes that happened the previous year. However, it was all going well till Victor had to spend 3 lakhs for an emergency. He had to run from pillar to post, ask friends & families, and talk to banks. Finally he was able to arrange for funds but it was a very stressful time for him!

    This is not a very uncommon situation. Many of the borrowers can easily identify with such situations where pre-payment of loan puts extra burden on them because it took all their savings leaving them exposed to any emergency situation. Pre-payment of your home loan is a double edged sword. It reduces the future obligation but incurs

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  • Asset allocation through Systematic Transfer Plan

    Before we understand STP, let's define SIP (Systematic Investment Plan) first. SIP is a disciplined way of investing where investors invest a regular sum every month in mutual funds. SIP is also known as rupee cost averaging and it is the best way to handle volatility in investment. For example, you start to invest Rs 5,000 every month in a mutual fund. If you do it via SIP, this money will be taken from your account every month and invested in the mutual fund that you have selected for SIP.

    STP is a variant of SIP. STP is essentially transferring investment from one asset or asset type into another asset or asset type. The transfer happens gradually over a period.

    STP and its importance

    Systematic Transfer Plan is of two types; fixed STP, and capital appreciation STP. A fixed STP is where investors take out a fixed sum from one investment to another. A capital appreciation STP is where investors take the profit part out of one investment and invest in the other.

    Example of STP


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  • What happens if you are caught evading tax?

    Individuals have the freedom to self assess income and pay taxes. That doesn't mean you can avoid declaring a particular stream of income to evade taxes and expect to get away with it.

    Tax evasion is an illegal activity which includes not filing income tax returns altogether or misrepresenting the tax payable amount. It is different from tax avoidance, which is a legal activity because tax laws are used to reduce the tax amount payable.

    Income tax returns are scrutinized only if income tax authorities feel that there is tax evasion. If they conclude that you have deliberately concealed income to reduce tax liability, you will be penalized.

    What does scrutiny of income mean?

    Scrutiny essentially means evaluating the income tax return for its authenticity i.e. the income tax assessing officer will go through the returns filed and various other documents such as bank statement, Form 16 among other things to check if there is any mismatch in tax liability assessed by the individual and the

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