Tax season can be intimidating for individuals, as it may increase their sense of liability and create anxiety. Jargon such as tax computation, exemption, rebate, and TDS can be difficult to understand, and the hefty amount paid as income tax can significantly reduce one’s take-home income. Managing expenses with a reduced income, while also having additional needs, can be challenging. Although one may be able to temporarily reduce some expenses, there are still other necessary expenses that must be met. Fortunately, individuals no longer have to struggle in this situation, as they can use an instant cash loan to prepare for tax season to prepare for tax season.
How to Prepare for Tax Season
- Calculate total income: The computation of tax happens when you have an income. Your total income is the basis for calculating how much you will pay as income tax. Thus, you must add up your income from various sources to determine your gross annual income. The Income Tax Act has divided it into five heads, namely: salaried income, income from business and profession, income from house property, capital gain (long and short term), and income from other sources. You have to be fair and reasonable while calculating your total income. While you will pay tax on it, you can also claim rebates under various sections for different incomes. It’s essential to save you from paying any penalties or facing legal actions taken against the misrepresentation of your income.
- Calculate deductions available: It may seem that the calculation of total income is enough, and now you can multiply the tax slab by the rate to determine the total payable tax. But no! The tax is calculated on your net income rather than gross income. You reach the net income after all the deductions allowed under the ITA 1961. It starts by giving a standard deduction of Rs. 50,000, which is allowed to all individuals without the need for proof. Next is the deduction u/s 80C of the ITA 1961, where you can claim deductions of up to Rs. 1.5 L. This is the biggest pool of deductions, and you can claim it for investments made in PPF, EPF, ELSS, Mutual Funds, Sukanya Samriddhi Yojana, etc. If you are investing in the National Pension Scheme (NPS), you can claim another deduction of up to Rs. 50,000, which is above the Rs. 1.5 L you claim u/s 80C. Besides this, if you have an ongoing home loan, you can claim a deduction of up to Rs. 2 Lakh on the interest paid through EMIs. This deduction is allowed u/s 24 of ITA, and it’s apart from the rebate allowed u/s 80C.
- Calculate total payable tax:After allowing all the deductions on your gross income, you reach your net income. On this income, you are liable to pay taxes. The following are the income tax slab rates for individuals under the new tax regime:
Slab Rate Up to Rs.3 lakh Nil Rs.3 lakh – Rs.6 lakh 5% Rs.6 lakh – Rs.9 lakh 10% Rs.9 lakh – Rs.12 lakh 15% Rs.12 lakh – Rs.15 lakh 20% Above Rs.15 lakh 30%
- Be ready with an instant cash loan: After claiming all the tax deductions and rebates, the tax season can leave many with a cash crunch. You pay the taxes and are now left with a lower monthly income. Managing expenses can already be tough, and on top of it, an additional or urgent monetary need can be challenging. If you are wondering about how to prepare for the tax season, use this loan. It gives a boost to your salary and supports all the cash expenses you may have. You can apply for it online and get instant approval.
Top 3 Reasons to Choose an Instant Cash Loan this Tax Season
- To pay off the tax liability: You can’t pay off all the TDS (Tax Deducted at Source) amount, and at the end of the financial year, you have to calculate your total income and tax payable, and then pay it. Using an instant loan, you can pay off all your liabilities without disturbing your budget.
- To save from late payment penalties: It is crucial not to leave your tax unpaid, as it attracts penalties, added costs, and legal actions against you. By using this loan, you can make on-time tax payments to avoid paying additional costs. You can repay the loan in EMIs over the period, whereas payment of taxes is done in one go
- To support your income after tax payment: When you start paying your taxes, your monthly income reduces for a few months, which can disturb your budget, given that expenses remain the same. You can use this loan to support your monthly income and meet your needs without any crisis.
As a salaried professional, you can apply for an instant cash loan from FlexPay. It provides a loan in the form of a line of credit exclusively for salaried people. With a salary of Rs. 8,000/month, you can avail a credit line of up to Rs. 2,00,000. It offers facilities like flexible EMIs and tenure where you can repay your dues in variable installments without any additional cost or late payment penalties over 36 months. With reasonable interest charges applied only on the sum spent, it’s a pocket-friendly credit facility. Since the interest is paid after using the money, you can maintain it as a permanent credit backup. By using this loan, you can easily sail through the tax season, pay your taxes in full and on time, and use this credit line for every other expense.