To begin with, most of us are unaware of the term – “Estate tax planning“. Often we tend to exclude taxes from our estate planning. The tax due on the transfer of assets to an heir or beneficiary after the death of the owner is usually high, which if not considered beforehand, might have an adverse effect on the results of your estate planning. Further, the tax-motivated estate planning helps you achieve your long haul goals. These goals might differ from having a secured financial future to having well-defined preservation plans of your assets on your death to assure the eventual prosperity of your loved ones.
Having said thus, Paisa Invest has sorted a list of basic tax and estate planning steps to help you begin in the right step towards a positive financial future for you and your loved ones. These steps are proven to reduce tax liabilities in estate planning and generating an overall concrete plan for the same.
Tax and estate planning steps:
- Prepare a will: India does not have an inheritance tax. Most of the estate acquired through a will in the country are exempted of the tax because it then becomes an inheritance and not a transfer of asset. However, the inheriter of the will has to pay tax on the income earned from the property such as capital gains or interest or rental income and so.
- Use gifting provisions: According to Section 122 of the Transfer of Property Act, 1882, the transfer of immovable property can take place through a gift deed. Although the stamp duty and the registration fee for the gift deed vary from state to state in the country, it is nevertheless immune from taxation under certain conditions such as gifts received from a blood relative and local authorities and so.
Hence, are the most fundamental steps for excluding tax from your estate planning. However, an estate planner might consider certain aspects of your specific situation before crafting the strategy for effective estate tax planning. These aspects might vary from capital gains taxation, transfer charges, inheritance tax, clubbing of income and the asset holding pattern, the religion of the owner of the assets and his/her beneficiary, the residency and citizenship status of the owner and the likely beneficiaries and so.
How can Paisa Invest help you in your estate tax planning?
Appointing a proficient financial planner to assist you in strategizing your Estate tax planning might ensure that you plan the economic future of your beloved most efficiently to save them of the possible eventual inconveniences in the form of unforeseen taxes and more. An expert financial planning consultant such as Paisa Invest can assist you in the same with their expertise, experience and knowledge of the current estate tax laws and regulations and their implications on your specific financial and estate planning.
Do you need professional assistance on estate tax planning? Contact Paisa Invest today!