Hey Mr Taxman

Should five per cent appear too small Be thankful I donrsquot take it all lsquoCause Irsquom the taxman If you drive a car Irsquoll tax the street If you try to sit Irsquoll tax your seat If you get too cold Irsquoll tax the heat If you take a walk Irsquoll tax your feet lsquoCause Irsquom the taxman THE Beatles were not far off the mark when they sang this ode to the tax man in the 1970s Only it is no longer just five per cent but a whopping 30 per cent of our total income that the IT department wants For consultants it is lower with a basic 10 per cent Tax Deducted at Source TDS But while evading tax is a crime saving tax is just plain smart With a little planning consultants can get most of the deducted TDS back Herersquos how CAR SEVA ldquoSave all your petrol and conveyance bills in a folder These are expenses you incur as a professional and therefore you submit for tax exemption Just make sure you retain the bills for the next two yearsrdquo Alpesh Gandhi a Chartered Accountant and tax consultant for over two decades informs us MOBILE ON WORK All expenses incurred on your mobile phone and landline can be submitted for tax relief under lsquoexpenses incurred on businessrsquo ldquoKeep itemised bills handyrdquo says Gandhi CHARGED UP Home electric bills too can be submitted for tax exemption since you do watch news on TV charge your cell phone work on your laptop and generally switch on the AC while working from home Donrsquot you DEPRECIATION COST All consultants can claim tax exemption on the depreciation value of their laptops and cars ldquoIn the first year one can claim tax relief on 15 per cent of the original cost So on a car that cost R5 lakh one can claim tax relief of R75000 In each following year it becomes 15 per cent on the reducing balance as the carrsquos value also goes downrdquo explains Gandhi The logic as a consultant you use a laptop ipad and a car to travel on work PRINTING AND STATIONARY Printing visiting cards or letterheads for your new startup Or buying books and journals Save all bills and submit the amount for tax exemption Chartered Accountant Alpesh Gandhi TRAVEL If your work involves traveling to another state or city save train tickets and hotel bills ldquoIf you are traveling on work it comes under professional expensesrdquo explains Gandhi FOOD Meeting a client Gandhi says make sure you keep the bill and if it is likely to fade get it photocopied ldquoMeeting clients over lunch or dinner for work is accepted as expenses incured professionallyrdquo he says RENT If you have a house or an office on rent from where you run your consultancy do your projects etc please file all original documents to claim tax relief says Gandhi EMPLOYMENT Does the nature of your work mean you have to employ a peon or a driver or an assistant ldquoYou can claim tax relief on the salary you pay him or herrdquo says Gandhi INVESTMENTS Of course if all else fails there are the good old 80C 80D 80E and other sections under which everyone can get relief from taxation beware All consultants need to pay an annual R2500 Profession Tax If your gross salary is above R10 lakh per annum you need to pay an additional service tax of 1236 per cent over and above the 10 per cent TDS For more details For Income Tax incometaxindiagovin For Service Tax wwwacesgovin For Profession Tax wwwmahavatgovinu00a0