Business
Why You Should Hire a Professional to Manage Your Taxes and Finances
Many people have questions about how to save money on taxes and which investments to make to maximize returns now that the new financial year has begun. Investors are becoming overly eager in their plan for rapid returns in the shortest amount of time due to the skyrocketing equity market. Investors should stand back and examine their finances to make sure they are allocating their assets as intended, making decisions based on their financial goals, and correctly complying with tax laws.
However, investors would need to be fully versed in both the book and the math to achieve all of this. If not, they must hire a guide to help them through the procedure. Unfortunately, people frequently want financial and tax advice at low, unsupportable costs and dislike having to pay for it. They are unaware that by saving a few thousand dollars, they increase their chance of suffering losses from poorly chosen investments or inaccurately filed taxes.
Common tax questions in financial wellness sessions reveal how terribly unprepared and ignorant people are about proper disclosures for tax filing. People inquire about how futures and options (F&O) income is to be shown, whether tax must be paid on fixed deposits since TDS is deducted, whether they can file an ITR1 for foreign stocks, whether they need to pay tax on the sale of their equity, and whether they can deduct HRA from their rent. The taxability of agricultural land, foreign stocks, F&O income/losses, capital gains, and HRA are some of the main areas where people might be making errors in the proper declaration or computation.
The questions indicate that people do not know much about tax laws and are filing their own ITRs based on this ignorance, which leads to underreporting income and underpaying taxes. Many people aren’t even aware of the significance of data matching with the annual income statement or advance tax regulations.
The cost of handling tax notices and penalties for withholding information can be three to five times higher than hiring a chartered accountant (CA) to file your taxes. Withholding information can have serious repercussions. Depending on the complexity of the ITR, the average cost of filing an ITR2 with a CA can range from Rs 10,000 to Rs 30,000. The benefit for the person is that they will receive appropriate counsel and guidance and their chances of receiving notices will be decreased.
In a similar vein, a financial planner’s responsibilities extend beyond merely making investment recommendations; they also include developing a plan based on financial goals and assisting clients through market and financial ups and downs. The financial advisor can offer objective opinions on the investor’s financial options.
It is clear from purchase data in equities that investors make decisions about their investments based on past performance rather than their financial goals. Despite the regulator’s data indicating that 90% of F&O traders lose money, people still swarm to organizations offering fast and high returns on their investments.
Investors should prioritize developing a professional mindset as the new fiscal year begins, followed by creating a well-organized financial plan, and last but not least, making sure all tax information is accurately disclosed and filed.
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