These 6 tax-saving resolutions will help you save a lot of money

Latest income tax news helps in planning for tax-saving better in 2023.

tax resolutions for 2023

We all wait for the latest income tax news and create our income tax plans depending on our earnings. However, many times our plans fail to come to fruition. We must recognize our tax resolutions and responsibilities. The tax department is not merciful or lenient when dealing with taxes, and you should make a few promises to yourself for taxes. These tax resolutions for 2023 will help you with taxes and provide long-term security and peace of mind. 

1. Check Your Annual Information Statement While Filing Tax Returns

An AIS (Annual Information Statement) contains the details of the financial transactions you conducted during a financial year. It includes income details of capital gains, interest, rent, profession, and salary. It also contains expenses like purchasing gold (cash Rs. 50,000 and card Rs. 2 lacs) and foreign exchange. It also includes your investments like bonds, stocks, or mutual funds. It also has information about the tax your employer pays on your behalf and the TDS that others deducted. You can check and verify your AIS to ensure the information regarding the financial transactions is correct.

Read: How can insurance help save tax?

2. Verify Your TDS Details in Form 26AS 

Form 26AS contains the TDS and TCS details and is a tax credit statement. You can access it through the income tax portal or your net banking account. You must check and verify the details of all financial transactions and ensure they match the records. You must contact your deductor if the TDS or TCS hasn't been credited. You can save time and effort if you keep checking it instead of running at the last minute. 

3. Do Not Ignore Your Earnings and Foreign Assets

You might find your tax compliance complicated if you own foreign assets. Individuals must report the accounts, immovable property, financial interests, and bank accounts in their tax return. It does not depend on the income and must be reported. Taxpayers ignore this sometimes but should not. You can attract charges from the Black Money and Imposition of Tax Act 2015 if you don't disclose this information. Cases can be opened any time in 16 years for this and can attract penalties. 

4. Use All Tax Deductions and Optimize Your Tax

One can avail of various tax deductions, and many people don't utilize all their options. Section 80 is one such option that helps with income tax deductions. You might have to pay more tax if unaware of all the tax-saving options available. The benefits can help you save a considerable amount of money. You can claim benefits up to Rs. 4-5 lacs. These are the ways to avail of benefits: 

  • Section 80C (Max Rs. 1.5 lacs)
  • Section 80CCD(1B) (Max Rs. 50,000)
  • Section 80D (Max Rs. 75,000-1 lac) 
  • Section 24 (Max Rs. 2 lacs)

5. Harvest Long-Term Capital Gains From Equity Funds and Stocks Before the End of the Financial Year

The stock market has performed exceedingly well after the pandemic. You can harvest around Rs. 1 lac long-term capital gains from your equity funds to pay less future tax. Long-term capital gains in equity and stock-oriented funds have Rs. 1 lac tax-free benefits. You can purchase these again. However, the acquisition price will reset at an increased level. You can ask your financial advisor about how much you can harvest. 

Read: How to save more tax after exhausting all tax-saving options?

6. Pay Advance Tax on Capital Gains and Interest or Dividend

Many taxpayers do not report their income from interest or dividends as they think they don't have any due tax once the tax is deducted. However, the TDS is 10%, and the interest and dividend must be taxed at the applicable income tax slabs. Taxpayers in higher income tax slabs must pay more. 

Ensure paying your income tax on time if you are invested in bank deposits, NSCs, or bonds. It would be best if you also kept the interest or dividend income in mind. Your AIS will show all these incomes, and you cannot escape its liability. You will also have to pay an interest of 1% as a penalty per month on delay. 

Read: Save tax with these tax-saving methods.

The ultimate tax planning and saving guide

We all wait for the latest income tax news and create our income tax plans depending on our earnings. However, many times our plans fail to come to fruition. We must recognize our tax resolutions and responsibilities. The tax department is not merciful or lenient when dealing with taxes, and you should make a few promises to yourself for taxes. These tax resolutions for 2023 will help you with taxes and provide long-term security and peace of mind. 

1. Check Your Annual Information Statement While Filing Tax Returns

An AIS (Annual Information Statement) contains the details of the financial transactions you conducted during a financial year. It includes income details of capital gains, interest, rent, profession, and salary. It also contains expenses like purchasing gold (cash Rs. 50,000 and card Rs. 2 lacs) and foreign exchange. It also includes your investments like bonds, stocks, or mutual funds. It also has information about the tax your employer pays on your behalf and the TDS that others deducted. You can check and verify your AIS to ensure the information regarding the financial transactions is correct.

Read: How can insurance help save tax?

2. Verify Your TDS Details in Form 26AS 

Form 26AS contains the TDS and TCS details and is a tax credit statement. You can access it through the income tax portal or your net banking account. You must check and verify the details of all financial transactions and ensure they match the records. You must contact your deductor if the TDS or TCS hasn't been credited. You can save time and effort if you keep checking it instead of running at the last minute. 

3. Do Not Ignore Your Earnings and Foreign Assets

You might find your tax compliance complicated if you own foreign assets. Individuals must report the accounts, immovable property, financial interests, and bank accounts in their tax return. It does not depend on the income and must be reported. Taxpayers ignore this sometimes but should not. You can attract charges from the Black Money and Imposition of Tax Act 2015 if you don't disclose this information. Cases can be opened any time in 16 years for this and can attract penalties. 

4. Use All Tax Deductions and Optimize Your Tax

One can avail of various tax deductions, and many people don't utilize all their options. Section 80 is one such option that helps with income tax deductions. You might have to pay more tax if unaware of all the tax-saving options available. The benefits can help you save a considerable amount of money. You can claim benefits up to Rs. 4-5 lacs. These are the ways to avail of benefits: 

  • Section 80C (Max Rs. 1.5 lacs)
  • Section 80CCD(1B) (Max Rs. 50,000)
  • Section 80D (Max Rs. 75,000-1 lac) 
  • Section 24 (Max Rs. 2 lacs)

5. Harvest Long-Term Capital Gains From Equity Funds and Stocks Before the End of the Financial Year

The stock market has performed exceedingly well after the pandemic. You can harvest around Rs. 1 lac long-term capital gains from your equity funds to pay less future tax. Long-term capital gains in equity and stock-oriented funds have Rs. 1 lac tax-free benefits. You can purchase these again. However, the acquisition price will reset at an increased level. You can ask your financial advisor about how much you can harvest. 

Read: How to save more tax after exhausting all tax-saving options?

6. Pay Advance Tax on Capital Gains and Interest or Dividend

Many taxpayers do not report their income from interest or dividends as they think they don't have any due tax once the tax is deducted. However, the TDS is 10%, and the interest and dividend must be taxed at the applicable income tax slabs. Taxpayers in higher income tax slabs must pay more. 

Ensure paying your income tax on time if you are invested in bank deposits, NSCs, or bonds. It would be best if you also kept the interest or dividend income in mind. Your AIS will show all these incomes, and you cannot escape its liability. You will also have to pay an interest of 1% as a penalty per month on delay. 

Read: Save tax with these tax-saving methods.

The ultimate tax planning and saving guide

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