It is the, ‘Taxing Time’ of the Year J
(Direct Taxes) – 5 Heads of Income Tax Computation in India –
Income from Salaries
Income from House Property
Profits and Gains of Business or Profession
Capital Gains
Income from Other Sources
Well, the income tax department is guiding all investors to have ‘Different Sources of Income’ –
Diversify, Diversify, Diversify, Diversify & Diversify.
Our Diversification leads them to collect taxes @ 10%, 20% & 30%, based on one’s income. No Way out L
(Indirect Taxes) – Customs Duty, Central Excise Tax, Service Tax, Sales Tax, Value Added Tax, Securities Transaction Tax (STT), Value Added Tax, Entertainment Tax, Luxury Tax etc…and I can’t continue for the sake of a long list.
Can we ever compile an annual figure on either the ‘absolute amount’ or the ‘%’ of Indirect Taxes, we end up paying at an individual / family level? No.
Everything is ‘Inbuilt’ into the consumption & we pay for this consumption, silently. No Questions asked. Why?
Because, it’s the law of the land and we need to follow this law. It might offer certain value, somewhere down the chain. What kind of value? No Idea L
Earn or Spend, we pay; Value addition or not, we pay.
Direct Taxes are levied on Earnings & Indirect Taxes are levied on Expenditures.
For Direct Taxes – Effective & Efficient Tax Planning on Earnings, is the key.
For Indirect Taxes – Reduce unnecessary Expenditures. Wisdom lies in not stopping consumption of needed goods or value added services & experiences in life J, but in stopping unnecessary material accruals & experiences.
Diversify, Earn, Spend, Plan Taxes, Pay, & Stay Clean.