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India Today
02-06-2025
- Business
- India Today
Rs 1 crore in 5 years: Check this guide for 40-year-olds earning Rs 2.5 lakh/month
Turning 40 often brings a fresh focus on future goals, especially when it comes to your children's education. For many parents, the big question is: Can I save Rs 1 crore in the next five years for my daughter's studies? If you're earning Rs 2.5 lakh a month, the goal may sound ambitious, but it's certainly achievable with the right planning, discipline, and smart investments. However, one needs to follow a well-planned, disciplined, approach and choose the right GROWTH SHOULD BE THE PRIORITYWith only five years to reach the Rs 1 crore mark, you'll need to focus on high-growth investments rather than playing it Polepally, Business Head at ClearTax, says, 'If a 40-year-old investor aims to build a Rs 1 crore corpus in just five years, they'll need to aggressively invest in high-growth assets. Investing Rs 1 lakh per month into a mix of equity mutual funds, especially flexi-cap, mid-cap, and thematic funds, can help target returns of around 16–18% per year, assuming consistent investing is maintained.'SAFER OPTIONS MAY NOT BE ENOUGH You might feel tempted to go for stable options like PPF, hybrid funds or endowment plans. But for a short-term goal like this, they may fall short.'Given the short investment horizon, safer options like PPF, endowment plans, or hybrid funds might not offer attractive returns and could lead to missed growth opportunities,' Polepally a better approach is to aim for higher returns while managing risk efficiently. It's also important to monitor risk indicators such as standard deviation, Sharpe ratio and downside capture to make informed decisions, he SHOULD YOU INVEST? A SAMPLE MONTHLY PLANadvertisementAvinash Polepally shared a simple example of how to divide your Rs 1 lakh monthly SIP smartly. Photo Credit: Avinash Polepally, Business Head, ClearTax Avinash Polepally recommends allocating Rs 35,000 to flexi-cap funds for broad equity exposure with an expected 18% return, likely yielding Rs 34,37,295. Rs 25,000 (25%) should go into mid-cap funds targeting a 20% CAGR, potentially growing to Rs 26,18,125. Next, Rs 10,000 (10%) in small-cap funds can target 27% returns, offering a projected value of Rs 12,72,735 in the next five years, while the same amount can be invested in thematic funds, with a CAGR of 26%, resulting in Rs 12,35,935 after five he said that for stability, Rs 10,000 (10%) in arbitrage or balanced advantage funds (7% CAGR) can grow to Rs 7,19,030 towards the end of five years. Finally, Rs 5,000 (5%) each in corporate bonds and gold ETFs add a safety cushion, both expected to deliver Rs 3,50,745 at the end of five other words, with a solid monthly income, saving Rs 1 crore in 5 years is absolutely doable. But it requires commitment, wise investment choices, and avoiding distractions. Start now, stay consistent, and your daughter's education fund will be ready right on time.
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Business Standard
26-05-2025
- Business
- Business Standard
Compare Form 16 and 26AS carefully, alert employer promptly on errors
Employers will soon issue Form 16, as they are mandated to do so by June 15. Salaried individuals must understand how to use this document effectively while filing their income tax returns (ITRs). Significance of Form 16 Form 16 is a key document for salaried individuals. 'It serves as an essential certificate of tax deducted at source (TDS) on salary income by the employer,' says Suresh Surana, a Mumbai-based chartered accountant. It consolidates salary income, deductions, and taxes. 'It simplifies the tax filing process by making all the relevant data readily available,' says Shefali Mundra, tax expert at ClearTax. Form 16 comprises Part A and Part B. Part A contains the employer's tax deduction account number (TAN), the employee's permanent account number (PAN), and a quarterly summary of salary paid and TDS deposited. Part B includes a breakdown of salary, allowances, perquisites, and deductions under Chapter VI-A (e.g., Sections 80C, 80D, etc.). 'It also reflects the computation of total income and tax liability based on applicable slabs,' says Surana. The income tax portal allows auto-population of ITR forms using Form 16 data. 'Such imported information should be carefully cross-verified with the employee's pay slips to ensure consistency in salary components, deductions, and exemptions,' says Surana. Role of Form 26AS Form 26AS, generated by the Income Tax Department, provides a consolidated view of all tax credits linked to the taxpayer's PAN, including TDS from various sources, such as banks, financial institutions, and even buyers in property transactions. It also reflects advance tax payments, self-assessment tax, and refund details. 'It serves as a centralised view of all tax credits available to a taxpayer. It is crucial for verifying that taxes deducted have actually been deposited with the government,' says Mundra. Many employees do not report income from fixed deposits or freelance work to their employer. 'As a result, this income, though taxed via TDS and reflected in Form 26AS, is missing from Form 16. If this income is not reported in the ITR, it can trigger income tax notices, delayed refunds, or additional tax demands,' says Mundra. Surana adds that cross-verification also helps verify any other income or high-value transaction reported in Form 26AS that needs to be disclosed in the return. Addressing mismatches TDS mismatches may occur between Form 16 and Form 26AS. 'An incorrect PAN in the employer's records may lead to missing TDS entries in Form 26AS. Mismatches could also happen due to incorrect TDS deposits by the employer,' says Santhosh Sivaraj, partner, global employer services, tax & regulatory services, BDO India. Verify that your PAN is correctly recorded in your employer's records. 'If there is a mismatch, contact your HR or payroll team and have your employer revise the TDS return with the updated details,' says Sivaraj. Once revised, the data will reflect in Form 26AS. Handling errors in Form 16 Form 16's accuracy depends entirely on the correctness of the data fed into it. 'Errors may include incorrect PAN details, omission of deductions due to missing proofs, wrong calculation of HRA or LTA exemptions, or incorrect tax computation. Sometimes the employer might employ an incorrect tax slab or fail to adjust for previous employment income,' says Amit Baid, head of tax, BTG Advaya. For issues in either Part A or Part B, contact the employer's HR or payroll team. 'For errors in Part A, which relate to TDS details generated through TRACES, the employer will need to correct the errors by filing a revised TDS return. For errors in Part B, which has the salary computation and break up prepared by the employer, the payroll or HR team should be approached directly to issue a revised Form 16,' says Baid.
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Business Standard
13-05-2025
- Business
- Business Standard
ITR 2025: Which form to use, what documents you need, and how to save tax
The tax season is here, and with it comes the annual ritual of preparing to file your Income Tax Return (ITR). For millions of taxpayers across the country—whether salaried employees, freelancers, business owners, or investors—filing your return accurately and on time is both a legal obligation and an opportunity to optimize your finances. If you want to file your income tax return smoothly, avoid errors, and potentially save on taxes, here are some essential tips by Shefali Mundra , Tax expert at Clear Tax Choose the right tax regime Taxpayers can choose between the old and new tax regimes. The old regime allows various deductions and exemptions, whereas the new regime offers lower tax rates with limited exemptions. Evaluate which regime benefits you more based on your income and eligible deductions. Many salaried individuals with high deductions (like 80C, HRA, and home loan interest) may benefit from the old regime, while those with simpler finances may find the new regime more attractive. Pick the Right ITR Form Choosing the correct ITR form is crucial. Filing the wrong one could result in your return being treated as defective. ITR-1: Income up to ₹50L from salary, one house property, and other sources. ITR-2: For those with capital gains, multiple properties, or foreign income. ITR-3: Income from business or profession. ITR-4: Presumptive income scheme for small businesses or professionals. Gather Key Documents in Advance Organize all relevant documents before you begin: Form 16 from your employer Form 26AS and Annual Information Statement (AIS) Bank interest certificates, rent receipts, capital gains statements Investment proofs (PPF, ELSS, insurance, etc.) PAN and Aadhaar Don't Miss Out on Deductions Maximize your tax savings by claiming deductions under: Section 80C (up to ₹1.5L): PPF, EPF, ELSS, principal on home loan Section 80D: Health insurance premiums Section 24(b): Interest on housing loans HRA, LTA, and other exemptions if you qualify Ensure that all claims are backed by valid documentation. Check Your Tax Credit Details Before filing, cross-verify the TDS reflected in Form 26AS and AIS against your actual income. Any mismatches must be clarified with the deductor to avoid refund delays or scrutiny. How to decide between old and new regime? If you claim deductions like Section 80C (PPF, ELSS), HRA, home loan interest, etc., the Old Regime may save you more. If you have a simple income structure with minimal deductions, the New Regime may be more beneficial due to lower slab rates.
India Today
12-05-2025
- Business
- India Today
ITR filing 2025: 6 Must-know tips for before you file your tax return
It's that time of year again, when we gather all our income details and prepare to file our income tax return (ITR). Whether you're a salaried employee, a freelancer, or a small business owner, filing your return properly and on time is Mundra, Tax Expert at ClearTax, said that staying informed, no matter the source of your income, can help you make the most of the deductions, steer clear of penalties, and even increase your to help you avoid last-minute stress or mistakes, here are six key things you should know before you WHICH ITR FORM TO USE Choosing the correct ITR form is important. Filing the wrong one may lead to rejection of your Income Tax Department has different forms for different types of taxpayers. For example, if you earn only from salary or pension, you'll likely need ITR-1. ITR-2 applies If your salary is over Rs 50 lakhs, or you have capital gains, more than one house property, or foreign income, if you have higher income, capital gains, or foreign income. On the other hand, if you have income from a business or profession, you may need ITR-3 or it is advisable to always double-check before AADHAAR WITH PANadvertisementBefore you even think about filing your tax return, make sure your Aadhaar is linked to your PAN. Shefali Mundra mentioned, 'It's mandatory to link your Aadhaar number with your PAN to file ITR. Failure to do so can lead to an inoperative PAN and complications in the filing process.'KEEP ALL DOCUMENTS READYBefore you start filing, gather all the important documents. "Be sure to have your Form 16, Form 26AS, and the Annual Information Statement (AIS)," said Shefali account statements and interest income certificates are also important. To claim deductions, keep investment-related proofs under 80C or 80D ready, she BETWEEN OLD AND NEW TAX REGIMEThere are two tax systems to pick from. 'Taxpayers can choose between the old and new tax regimes. The old regime allows various deductions and exemptions, whereas the new regime offers lower tax rates with limited exemptions and deductions. Evaluate which regime benefits you more based on your income and eligible deductions,' stated if you have business or professional income and wish to continue with the old regime, you'll need to submit Form 10-IEA before filing your ALL INCOME, EVEN SMALL ONESWhile most people remember to report their salary, it's equally essential to mention other types of income too. This includes bank interest, rent from properties, freelance payments, and even small investment profits. Reporting everything helps avoid notices from the tax department YOUR RETURN AFTER FILINGadvertisementFiling your return online is just one half of the process. The other half is submitting the ITR, you must confirm your identity, either digitally using Aadhaar OTP, internet banking, or other options, or by sending a printed and signed ITR-V form to the Centralised Processing Centre (CPC), Income Tax in Bengaluru. If this step is missed, your return will not be processed by the tax stated, 'Filing your Income Tax Return doesn't have to be overwhelming—especially when you're well-prepared.' Starting early, understanding the right tax regime, selecting the appropriate ITR form, organising your documents, and double-checking details not only helps you stay compliant but also helps you make the most of your tax-saving Reel
Indian Express
12-05-2025
- Business
- Indian Express
Top 10 states in India by GST revenue in FY 2024: Who contributed the most in April 2025?
Top 10 highest GST-paying states in India: Goods and Services Tax (GST) was introduced on July 1, 2017, as a major change in India's approach to fiscal reform to streamline and simplify India's tax system. According to ClearTax, last year's (2024) total GST revenue collection reached Rs 21.36 lakh crore, the highest since 2017, and an 8.86% increase over the previous year's collection. The gross GST revenue collections in April 2025 totalled Rs 2,36,716 lakh crore, representing an annual growth rate of 12.6%, according to the Ministry of Finance's most recent data. Maharashtra leads the rankings of total GST collection for FY 2024 and even in April 2025, however, the financial capital's growth slowed to 11 per cent this April from 13 per cent in April 2024. Gujarat outpaced major GST-contributing states, seeing a 13 per cent year-on-year increase, and total GST revenue rising to an all-time high of Rs 14,970 crore for April 2025; meanwhile, for the financial year 2024-25, it recorded a total GST revenue collection of Rs 1,74,938 crore as per the GST Council data, accessed via Forbes. In a notable mention, as of April 2025, Lakshadweep recorded an exceptional 287 per cent rise; meanwhile, northeastern Indian states like Arunachal Pradesh reported a 66 per cent growth in GST collection, followed by Meghalaya at 50 per cent and Nagaland at 42 per cent. Note: The data for total GST Revenue Collection for FY 2024 has been sourced from the GST Council (accessed via Forbes), and for April 2025 data (which does not include GST on import of goods) has been sourced from Cherry Gupta is an Assistant Manager - Content at The Indian Express. She is responsible for crafting compelling narratives, uncovering the latest news and developments, and driving engaging content based on data and trends to boost website traffic and audience engagement. One can connect with her on LinkedIn or by mail at ... Read More
