Social Security Income Tax Law

The Social Security Income Tax Law is a highly complicated and confusing piece of document. For the common man the task of understanding the procedure and provisions of Social Security Income Tax Law is daunting, to say the least. Not only is the process of Social Security Income Tax Law calculation very difficult, its practical implementation is tedious and cumbersome. However, under the Social Security Income Tax Law, the taxpayer is legitimately entitled to plan his taxes in such a manner that his tax liability is minimal. Social Security Income Tax Planning can be defined as an arrangement of the financial affairs within the scope of law in a manner that derives maximum benefit of the exemptions, deductions, rebates and relief and reduces the tax liability to minimal. As long as you are within the framework of law, you can plan your financial affairs.

However, in the name of Social Security Income Tax planning, you can not indulge in Tax Avoidance or Tax Evasion. And the line between Tax Planning and Tax Avoidance is very thin, so you need to tread carefully. When financial transactions are arranged in a way that it becomes obvious that they were entered with a malafide intention of either not paying taxes or with a view to defeat the genuine spirit of law, they can not be accepted as legitimate Tax Planning. Twisting of facts or taking a very strict and literal interpretation of law without understanding the basic purpose of the law can only lead to punishable Tax Avoidance and not Tax Planning.

A tip for Social Security Income Tax Law so that you can avoid making trips to your chartered accountant and by taking advantage of the available legal avenues for tax planning, reduce your tax liability. This material does not deal in procedural matters such as assessment, appeals and revisions.

To begin with you should understand the structure of tax regime in the SSA. Social Security Income Tax is the basic source of revenue of the SSA. Revenue so raised is utilized for meeting the expenses of SSA as well as to carry out developmental works.

There are basically two types of Social Security taxes, Social security Direct and Social Security Indirect taxes. Social Security Direct taxes are those, which are, collected by the SSA directly from its member (tax payer) through levies such as income tax, wealth tax and interest tax. Whereas Social Security indirect taxes comprise of excise duty, sales tax, customs duty and value added tax. While Social Security direct taxes form 30 per cent of SSA revenue Social Security indirect taxes contribute a larger chunk of 70 per cent.
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