In the previous posts I discussed the status of Tax Saving Investments.
There are ways to at least minimize some impact of taxes. Here are some of them.
Will write about individual ones in detail is sometime, insha-allah. Update: Added articles of couple of topics.
Initial seven options are ones that every single salaried person can make use of; remaining are case-specific:
- HRA (House Rent Agreement)
- Internet and Telephone Rental
- Landline phone
- Mobile phone
- Broadband/ ADSL Internet
- Medical Allowance
- Insurance (maybe or may not be valid)
- Pure Life Insurance (Term Insurance)
- Self/Spouse/Children Mediclaim
- Parental Mediclaim
- Donations to registered NGO/ Madrasas'/ Relief Funds/ Charitable Trusts.
- Conveyance Expenses
- LTA (Leave Travel Allowance)
- Meal Coupons (and maybe some Gift Coupons)
- School Fees of children.
- Donation to political parties (I hope no one uses this one:))
- Medical treatment for self in case of catastrophic illness/ disability.
- Medical treatment for dependent handicapped/ disabled.
Pray for the taxes that you pay
I really mean it. Even if you adopt all of the measures am suggesting below you would certainly pay a good amount of taxes. Not to mention the huge amount of indirect taxes that everyone has to pay and there is no escape. (Indirect taxes are taxes on goods and services. So whenever you buy something it has a big chunk of tax built into it. Like say a cellphone costing 10K could have 2-4K of tax in it. So this unknown tax is actually also huge in number.)
OK back to the main point. Suppose you end up paying 50K tax in a year (not taking into account your indirect taxes). Now this is a good amount. Even your Zakat will be much less than this (unless you have inherited some good amount of wealth).
We all know how efficient and ethical our governments are. If they allot 100 crores to a project, on an average maybe 20 crores might be used for the exact purpose; rest being pocketed for the luxuries and black money of the politicians.
Now your hard-earned money should not go to feed such people's riches. So you should pray to Allah that the taxes paid by you end up in the good things like building school, hospitals, empowering the poor and disabled, salaries of workers, relief-work, scholarships etc.
Well, that it the only thing that we can do for the taxes we pay.
Well, that it the only thing that we can do for the taxes we pay.
