Why to pay tax ?
How many of you want to pay tax happily ?
both the questions will attract a big NO or most of you may say that we don’t have a choice.
Absolutely true, you don’t have a choice and it is the government rules and regulations that you need to pay tax if you are a citizen of India.One more burning point which i see is that government trying to take more money from those who are already paying taxes.
So with no choices 2 things you can do,
- Keep whining about taxes paid
- Take wise decisions and become wealthy.
Both are choices and you can choose depending upon which make you happy.
From the time we had known all the rulers across the world have taxed people and they had done welfare activities for most of the citizens. The people who were wealthy earlier were the one who have taken the opportunities and hardships early in their life that they traded and made more money. As they made money much more than citizens of the same kingdom they were taxed and distributed to others as well.
Rich stays wealthy because they focussed upon the business and they didn’t focussed upon the taxes which existed. If you say me that you are not a rich guy, then change the thinking alone. In India, option exists in the form of section 80C and 80D to take care of our wealth and health.
Current scenario :
Irrespective of you are a salaried or Business person, the above mentioned sections are seen as something to save tax alone.
Do you disagree ?
but surely it can be seen as the way to make wise investment choices.
Based on my interaction with many of the business community and my experience as a salaried person, most of you use this section to save tax alone. There are people who finds way to show under these sections, for example, they showed the tuition fees of their kids, PF and home loan principal alone to complete section 80C.
If you are trying to show off section 80C and not using 80D properly means you will end up cursing paying taxes to government. Remember once you start whining about money going out, it will start flowing out slowly.
Consequences are, you will not invest wisely and end up not having any big amount even after 20 years of being working or doing business. In addition you will not attract more money because you started complaining about paying money to someone else which in this case is Government.
How to save tax ?
What if you are using PF and equity as an option diligently for 15 years so that you accumulated more than a crore.
Provident Fund – 50,000
Equity Mutual fund or ULIP – 1,00,000
Investing above numbers for 20 years at a conservative return of 12% can give you more than 1 crore.
If you had invested entire 1.5 lakhs for 20 years into equities then too taking conservative returns of 15%, you may end up having more than 1.5 crores.
This 1 crore is just by saving for section 80C alone, after seeing equity returns if you have started planning your investments properly think about the bigger amount you can make in 20 years timeframe itself.
Make your money to work harder to create wealth !