The daunting task of filing taxes

Why am I writing this?

When I started working, no one told me about taxes or various investment tools. I mean I just started working, focusing on my work till one day my dad called and said you have to file your taxes and I told him I had no clue how to do that. He asked me for a few documents and said it will be done. I didn’t even know he had already done some tax savings for me. I was lucky, just as so many of us are, where our dads simply take care of these crucial things for us. 

But here's the thing, a few years later, I realized I had made so many mistakes along the way. And that's when it hit me—I want to help you avoid those same mistakes and become financially independent and literate right from the beginning.

Over the years, I’ve helped many of my young female colleagues understand this process and it dawned on me that this knowledge needs to be shared with a wider audience. You see, I want you to know that you're not alone in this. There's no shame in admitting that you don't know it all. Yet. But here you are, reading this post, and let me tell you, that's a significant first step towards taking control of your financial future.

As I write this, I can't help but wish I had a big sister figure who could have guided me through these complexities. Someone who could have shared their experiences and helped me navigate this unfamiliar territory. But guess what? I'm here to be that big sister for you.

Let’s start with the basics!

So, you're either new to the workforce or have been working for a while, and when it comes to managing your finances and paying taxes, it feels like a daunting task. Don't worry; you're not alone! Most of us have relied on our dads or chartered accountants to handle it all. But hey, it's your hard-earned money, and you should know what's happening with it, right? Well, fear not, my friend, because I'm here to break it down for you in simple terms!

Understanding the Basics

Okay, let's start from scratch. When we earn money, whether it's from our job or other sources, the government requires us to pay a portion of it as taxes. Now, you might be wondering why we have to do this. Well, it's how our country functions! The taxes we pay fund important public services like healthcare, education, infrastructure, and various government programs. In a way, it's our way of investing in the progress of our nation.

Tax-Saving Investments

But here's the good news: you have options to save some of that money you're supposed to pay the government. How? By investing in tax-saving instruments. Remember, not all investments are tax-saving investments. This can be a bit confusing, especially with mutual funds. Some mutual funds are meant for tax-saving purposes and have a 3-year lock-in period, while others are simply for growing your money, and they are taxable. So, be sure to choose wisely!

Filing Taxes Made Easy

Now, let's talk about filing taxes. It's simply reporting your income and paying the due amount to the government. Don't worry; it's not as complicated as it sounds! Every year, usually in April, you're supposed to file your taxes on an income tax website created by the government. This covers the financial year, which starts from April 1st and ends on March 31st of the following year. You have a few months to get this done before incurring any penalties for late filing.

Why is this important? Well, besides avoiding legal consequences, it can impact your future plans. Imagine wanting to buy a car, a house, or even applying for a visa. You'll be asked to provide documents proving that you've paid your taxes. If you haven't, well, let's just say those dreams might have to take a back seat. So, bottom line, YOU HAVE TO FILE YOUR TAXES.

Take It Step by Step

Okay, that was a lot of information to absorb. Don't worry; I won't overload you. In my next post, I'll guide you on how to file your taxes on your own. Remember, learning something new can be intimidating, but the trick is to break it down into smaller steps. No one becomes an expert overnight. Take baby steps, and I'll be right here to help you navigate the way.

Let me know if you found this information helpful. Stay tuned for the next post, where we'll dive into the practical aspects of filing taxes independently. You've got this!