I am sure most of you must have submitted the investment proofs based on the timelines received from the Finance/payroll team to submit the invest proofs for financial year 2010-11.
No, this is not one more article giving tips to save taxes.
Ever wondered why the government has to come up with tax-saving instruments. They could have simply cut the tax based on the slab or whatever criteria defined and save all of us from the heck of investing and then submitting proofs of investments done.
One has to understand so many various sections, their associated criteria of saving tax and the inclusions and exclusions. For sure, its not one of the easiest job to do.
One has to understand so many various sections, their associated criteria of saving tax and the inclusions and exclusions. For sure, its not one of the easiest job to do.
I wondered and the result is this post. I want to kind of throw light on the economics and motive behind the various Tax saving instruments available to us.
For the government to offer Services, for it to carry out development, for it to carry on the governance; its needs money. Taxes are one of the sources for government to earn money. Out of the various taxes, an important source is the tax which we all pay in the form of TDS(Tax Deducted at Source).
If we look at the roles and responsibilities of any government, it should not only carry out development work, offer services to its citizens but also empower the citizens, the society to prosper themselves. Instead of keeping money directly in the hands of citizen, it should distribute the money using programs which empower the people to take control of their own economic well being. One such program currently run in India is NREGA.
Also, the government alone cannot fulfill the demand of services and development, it alone cannot match the pace needed to keep the economy growing, it alone cannot create all the jobs needed, it alone cannot meet the need of the infrastructure development. The list just keeps on growing as you start thinking on these lines.
The investment instruments are the medium through which the government empowers local enterprises, triggers certain economic sectors to grow. In short keeps the wheel of economy going so that money. The tax relief of 20,000 for investment in Infrastructure Bonds is an example. This investment option was added in 2010-2011 budget to boost the infrastructure of India and thus meet the growing demand for infrastructure.
The various tax saving instruments and slabs designed by government t are not for only tax saving for you but also for the overall development by including private enterprises into the game. The tax deducted at source would go to government kitty whereas the money invested in the tax saving instruments goes to both Government and the private players. This ensures that the goals which government alone cannot fulfill are supported by the various private players, public-private enterprises also.
And above all it helps the tax payer build wealth which is again a responsibility of Government to ensure that the citizens who are earning well today have a fine tomorrow also when they retire and are not dependent on the Government.
In short, the tax saving instruments are intelligent ways through which we can build wealth and also take part in the development of the nation.
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