In December, employees typically start getting letters from their human resource department to provide documents to support their tax-saving declaration made in March. This year, there is a twist in the tale.
Sudhakar Rao, an employee with a large private sector firm is due to retire in two months and is planning his post-retirement life. His finances are in order. He has no liabilities since his home loan has been paid off.
Recently, a senior citizen received a notice from the Income Tax Department, asking her to pay Rs 30,000, the tax on her bank fixed deposits for assessment year 2013-14, along with interest, for late payment of tax.
Debt mutual funds were a perfect substitute to the conventional fixed deposits (FDs) because they offered much better post-tax returns. But the Budget 2014-15 took away the tax advantage of debt funds.