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In an investing journey, it’s important to clearly understand the risks of investing, product suitability and have a well-set investment objective. However, many of us are guilty of ignoring basic ground rules of financial planning and end up with poor investing experience. Therefore, it is important to understand the prerequisites of building a portfolio for long-term wealth creation. 

TDS stands for Tax Deducted at Source. As the name suggests, this tax is deducted by the income payer (deductor) while making a payment to the deductee. Such taxes are taken from the total amount payable by the payer and deposited with the Income Tax Department. The person paying the income and deducting the TDS is called the deductor, while the person receiving the income and on whose behalf the tax has been deducted is called the deductee.

As per income tax laws, all taxpayers must file their Income Tax Return (ITR) for the previous year, within the prescribed due dates, during the assessment year. The due date for filing tax returns for salaried taxpayers & non-audit businesspersons and professionals is usually July 31. Sometimes this date may be extended by the Finance Ministry.

Since the terms  'financial year', 'previous year' and 'assessment year' are often used in income tax laws, it’s helpful for all taxpayers to know their basic meaning. Read on to know the meaning and importance of these terms.

When talking about various tax benefits and tax incentives to the taxpayers under the Income Tax laws, deduction under Section 80C is one of the most commonly used tax benefit. It provides a deduction of up to Rs. 1.50 lakh to the taxpayers from their taxable income for making certain eligible payments and investment options. Such options include contributions to Public Provident Fund (PPF), Statutory Provident Fund (SPF), payment of Life Insurance Premium, housing loan repayment, 5-year tax-saver fixed deposits etc.