As you come closer to tax filing deadline, you would begin running to your chartered accountant to make sure everything is set perfectly.

The nature of tax pay is such that you are bound to commit mistakes if you do not follow the stringent rules of taxes.

It is No prescription cialis advised that you hire a tax consultant to make your tax filing a bit easier.

If not, you should then be careful to transact each detail while paying taxes.

Here are five mistakes that you should avoid while paying taxes.

-Interest accrued from my bank savings account is exempted from tax. I wonder how many people think that way. Each country may have its own limits, but interest that you earn on your bank’s savings account may be taxable if it touches the taxable limit. Taxes would be deducted at source. Therefore, you should not put everything on a single basket; rather stretch your savings on many banks, as it would help you save taxes.

-My cousin has sent me a cash gift. Why should I pay taxes on the gift? Yes, you may be right, if the cash gift you received doesn’t touch the taxable limit. If the cash gift you received has not touched the taxable limits, then you won’t have to pay a penny as tax.

-I would transfer a part of my savings in my child’s name to get exempted from taxes, or pay less tax. Your idea would work only if your child is not a minor. Transferring any amount to your minor child’s name would not help you by any means. The tax laws are such that your minor’s income is clubbed with your income and the tax is calculated on the final amount. Never commit a mistake of increasing your child’s age as it would then result in a much heavier punishment for you. But if your child is not a minor, then you could save taxes, as the amount transferred to your child’s name will be taxed as an individual entry on your child’s name.

-I have invested in tax saving mutual fund scheme to save my income tax. That’s fine, but you should be aware of the locking period of the mutual fund scheme that you had invested in. Normally, there’s a three year locking period on mutual funds, and if you withdraw your invested fund before the locking period, you will not be able to save taxes.

-I had purchased a flat and now I would get a tax rebate on the repayment. To avail the tax benefits, you must occupy the house. You won’t get any tax rebate if you had given your flat on lease.

Make sure you keep your eyes wide open while you file your returns. Never forget to mention any income that you accrue.

If you don’t have an eye for extensive detailing, it would be simply better for you to hire a tax consultant and look forward to file your taxes.

Author Bio: http://rajivzone.blogspot.com/2009/07/five-mistakes-people-commit-while_10.html

Category: Finances
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