Your attitude towards tax depends on your understanding of tax rules. find out which of these categories you fall into.
INNOCENT OFFENDERS
Their understanding of tax rules is based on poor knowledge and half-baked assumptions. They think TDS ends their tax liability, and that the interest on tax-saving infrastructure bonds is tax-free. Some assume that last year's budget exempted up to Rs 10,000 interest on bank FDs. The exemption is only for savings bank interest.
SUPER HONEST
A rare species, these taxpayers are honest to a fault. They take keen interest in financial matters and keep their books up to date. Every single rupee earned is accounted for. All taxes are duly paid and returns are filed well on time. Such people will dutifully pay the tax even on the interest they receive on a delayed refund from the Tax Department. It's mostly the senior citizens who fall in this category.
OPPORTUNIST AVOIDER
This type of taxpayer is clued in to tax rules and new developments. They claim all possible exemptions and deductions and invest in taxefficient avenues to minimise the tax outgo. These are mostly individuals with a high net worth-top-level salaried employees or businessmen. They tend to hire tax professionals for managing their financial affairs, but also know that it is money well spent.
INNOCENT OFFENDERS
Their understanding of tax rules is based on poor knowledge and half-baked assumptions. They think TDS ends their tax liability, and that the interest on tax-saving infrastructure bonds is tax-free. Some assume that last year's budget exempted up to Rs 10,000 interest on bank FDs. The exemption is only for savings bank interest.
SUPER HONEST
A rare species, these taxpayers are honest to a fault. They take keen interest in financial matters and keep their books up to date. Every single rupee earned is accounted for. All taxes are duly paid and returns are filed well on time. Such people will dutifully pay the tax even on the interest they receive on a delayed refund from the Tax Department. It's mostly the senior citizens who fall in this category.
OPPORTUNIST AVOIDER
This type of taxpayer is clued in to tax rules and new developments. They claim all possible exemptions and deductions and invest in taxefficient avenues to minimise the tax outgo. These are mostly individuals with a high net worth-top-level salaried employees or businessmen. They tend to hire tax professionals for managing their financial affairs, but also know that it is money well spent.
OVERTAXED IGNORANTS
Also fairly common, they don't even know the basic tax rules and have little interest in financial affairs. They will do nothing to avoid the TDS on their deposits, or try and get back the excess tax paid by filing returns. They think nothing of foregoing their right to adjust stock losses against other gains. It's an attitude rooted in laziness and nourished by fear of the taxman. Most of the people who fall in this category do not file returns.
HONEST BY DEFAULT
These taxpayers are honest because they have no option. Their sources of income are such that tax is deducted at source or these sources are known to the Tax Department through other channels. Any attempt to evade tax will be easily detected, so honesty becomes the best policy. They are also forced to file returns in order to reclaim the excess TDS.
COMPULSIVE EVADER
They under-report income, inflate business expenses, conceal assets and investments, transact in unaccounted for money and claim deductions using fake documents. They are the pillars of the black economy. No matter how low the tax rate, these compulsive evaders will tread the crooked path. However, they need to be lucky all the time; the taxman has to be lucky just once.
Also fairly common, they don't even know the basic tax rules and have little interest in financial affairs. They will do nothing to avoid the TDS on their deposits, or try and get back the excess tax paid by filing returns. They think nothing of foregoing their right to adjust stock losses against other gains. It's an attitude rooted in laziness and nourished by fear of the taxman. Most of the people who fall in this category do not file returns.
HONEST BY DEFAULT
These taxpayers are honest because they have no option. Their sources of income are such that tax is deducted at source or these sources are known to the Tax Department through other channels. Any attempt to evade tax will be easily detected, so honesty becomes the best policy. They are also forced to file returns in order to reclaim the excess TDS.
COMPULSIVE EVADER
They under-report income, inflate business expenses, conceal assets and investments, transact in unaccounted for money and claim deductions using fake documents. They are the pillars of the black economy. No matter how low the tax rate, these compulsive evaders will tread the crooked path. However, they need to be lucky all the time; the taxman has to be lucky just once.
Source : http://economictimes.indiatimes.com
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