Easy ways to reduce your TAX BURDEN

(Guest)

We all know that taxes are must for the Government of any country. Government collects tax so that they can spend it on welfare of the country. So we have to pay tax for the betterment of our country. But when we see the large amount of tax to be paid, we get tensed and sometimes even we changed our mind also. But there are many ways to reduce your tax liability and by applying those benefits we can save our tax amount to some extent. So, take a look on some ways which helps to reduce tax burden.

We can reduce our tax liability by availing all deductions. Deductions may be claimed in respect of certain payments, in respect of certain receipts and also for some standard deductions. Many times we fail to consider some deduction. So while computing your Total Taxable Income always considers the deductions.

Donations to charity are tax deductible expenses. These donations can reduce your taxable income and lower your tax bill. Not everyone will be able to deduct their charitable contributions, however. You will need to itemize your tax deductions in order to claim any charity.

If you have made any long-term capital gains from sale of property, gold or debt funds, you can set them off against short-term capital losses made on stocks and bring down your tax liability. Short term capital losses can be set off against both short-term capital gains as well as taxable long-term capital gains. Yes, always try to use your short term capital losses to offset capital gain.

Before buying or selling any capital assets take advice from same experts. Like – If you are going to sell your long-term capital assets, then sell it on April instead of March to get higher indexation benefit.

If you invest your money correctly you can get the advantage of deduction. Try to invest your fund in LIC, Mediclaim and mutual funds etc.

Decide whether cash basis or mercantile basis is beneficial to you. Because tax amount depends on the accounting system you are following. So, always choose the most suitable accounting policy.

Pay all bills due on phone services, rent etc before the end of the year to avail full credit.