Arjuna (Fictional Character): Krishna tomorrow is "Rama Navami", which is celebrated with full devotion and enthusiasm all over the country. Why this day is important for all and the taxpayer?
Krishna (Fictional Character): Yes Arjuna, On this day Lord Ram was born. Ram Navami falls on the Shukla Paksha on the Navami, the ninth day of the month of Chaitra. Every person should try to inculcate the character of Lord Rama.
Arjuna: Krishna "Shri Rama" is known as "Maryada Purushottam". In his reign all people grew financially and socially due to which all were happy. Then in today's era how taxpayers can grow financially and socially and be happy and contended?
Krishna: Listen Arjuna, Lord Rama never crossed his boundaries due to which everyone call him as "Maryada Purushottam". Sita Devi crossed "Laxman Rekha" which was the cause for the epic of "Ramayana". Similarly in today's world if everyone wants to grow financially and socially then taxpayer and government should go hand in hand and help each other. It means taxpayer should not cross the "Maryada" i.e. boundaries of Laws and regulations marked by government.
Arjuna: Krishna, tell me how Government has drawn "Laxman Rekha" for the taxpayers?
Krishna: Arjuna, Government through various rules and regulations has drawn "Laxman Rekha" for the taxpayers and also decided boundaries i.e. Limit.
Some of these Limits are as under:
1. In Income Tax the boundary of taxable income for filing income tax return for individuals is Rs. 200,000/-, for senior citizens (age 60 years and above) Rs. 250,000/- and for super senior citizens (age 80 years and above) it is Rs. 500,000/-. It means if one crosses these boundaries of taxable income then he should file income tax returns otherwise he may land up in trouble.
2. For Deducting Tax at Source (TDS) government has specified the boundaries for e.g. tax will have to be deducted at source if professional fees paid or payable exceeded Rs. 30,000/-, Interest expenditure exceeding Rs. 10,000/- etc. Hence businessmen should follow TDS rules and regulations scrupulously.
3. For Cash payment of expenses, the boundary is set at Rs. 20,000/- per person per day i.e. payment above Rs. 20,000/- have to be made by bank.
4. Taxpayer should not give or take loans above Rs. 20,000/- in cash. Crossing this limit will land taxpayer in trouble of penalty.
5. Taxpayer should not forget the boundary of Rs. 100,000/- for deduction from total income under section 80 C, while filing return of income.
6. Taxpayer should also not forget the boundary of Rs. 15,000/- for medical insurance deduction from total income under section 80 D.
7. Taxpayer can take exemption of interest on borrowed loan up to Rs. 150,000/- under Income from House Property. Hence plan House loans and repayments accordingly.
8. The boundary for carrying out compulsory tax audit for businessman is turnover of Rs. 1 Crore and for professional it is services provided above Rs. 25 Lakh.
9. Purchases and Sale if crosses the boundary of Rs. 5 Lakh in a year then VAT registration is compulsory.
10. The boundary for carrying out compulsory VAT audit is turnover of Rs. 60 Lakh. This is tricky as compared to tax audit limit of Rs. 1 Cr.
11. If businessman gives salary to the employees above Rs. 5,000/- in a month then he is required to deduct and pay profession tax.
12. As per provisions of Service tax, if a person has provided services above Rs. 9,00,000/- then he has to obtain service tax registration. Further if services provided during the year crosses Rs. 10,00,000/- then he is required to charge and pay the service tax to the government.
13. If in business more than 20 employees are employed then registration under Provident Fund is compulsory.
14. If the wealth of taxpayer exceeds the boundary Rs.30 lakhs then he will have to pay wealth tax and also file the wealth tax return.
15. If taxpayers have more than 10 wage earners, earning wages less than Rs15,000 per month, then deduction and payment of ESIC is compulsory.
Arjuna: Krishna it means taxpayers should follow these and other boundaries of tax laws otherwise taxpayer will have to face "Vanvas". Krishna, how taxpayers can obey to the financial boundaries?
Krishna: Arjuna, as Shri Ram taking Wife Sita, Brother Laxman, Devotee Hanuman, Friend Sugriv and many others along with him established "Ram Rajya". Similarly in life, one should take his parents, brother, sister and others along with him and live happily. Taxpayers should do proper tax planning of his near and dear ones. Taxpayers should file Income tax returns of all his family members, keeping in mind the limitations of tax laws.
Further in this "Kalyuga" no one likes limitations. Officer should give justice to taxpayers within four corners of laws and taxpayers should pay appropriate taxes and thereby help in establishment of financial "Ram Rajya" in India. Taxpayer should try to be as "Maryada Puroshottam" i.e, within limits of laws. Ravana of Corruption can be eliminated by such way.