At the end of each financial year, all citizens who are earning handsome salaries have to go file Income Tax returns. IT return is the mode, with which government keeps the record of earning of each citizen of the country. By filing returns on time one not only gets saved from paying penalty but also become eligible apply for housing loan or car loan etc. Basically the income tax system is divided into two categories called progressive and regressive, and is applied to the individuals or business groups in different modes. In progressive type the tax is calculated on annual income of the applicant .By this tax, the tax rate increases as taxable base amount increases. Here the people who have lower ability to pay are somewhat benefited because the rate shifts increasingly towards those who have higher ability to pay. In regressive type the structure is applied uniformly. The incidence is more on people with lower earning than those with high earning, so as a whole, the individuals with lower income suffer more.
The applicants have to hire a licensed tax consultant or organization to proceed through them . They also provide the financial tips to get maximum rebate on the tax. The applicant should gather the thorough knowledge like where to invest and how much money he should put in a particular category to save maximum on the tax and other methods of saving. We give below a few tips which the readers can keep in mind for filing their income tax returns in a more effective manner:-
Any expenses incurred during traveling are 100% tax deductible. So people can enclose their, plane or train tickets, hotel bills, taxi bills, car rental bills, parking receipts, toll tax receipts, petrol receipts, restaurant bills etc. to avail the tax benefits.
Tax rebates can be availed by investing in insurance products, mutual funds, national saving certificates etc. under different categories. Any donations made to charitable organizations such as government recognized NGOs, can be utilized to avail tax deductions.
Expenses towards medications by owner of the firm or any of his employees are tax deductible. So any medical bills should also be retained for income tax rebate purpose.
Justin Ryder is author of Acme Accounting. For more information about payroll service canada, bookkeeping service canada visit www.acmeaccounting.ca
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