E-filing has the potential to make tax returns stable and easier on the nerves of taxpayer at the end of every financial year. It is safe, easy and perfect procedure of electronic filing or submission of Income Tax Return through online software. E-filing is the best and fastest way to file tax returns because it manages data for immediate transaction in less than 20 minutes.

Online E-filling’s benefits are as follow:-

You will be astonished to know the collection of benefits which you can enjoy by e-filing your tax returns online. Some advantages of e-filing:-

One of the major advantages of online filing is direct submission of data about tax returns to IRS. The chance of errors in calculation goes downhill because of the various tax preparation software used by service providers for e-filing. Online filing provides double-checking of all the information mentioned in forms. In case of any mistake you will receive message about error for correction. So, the e-file submitted to the IRS assures the accuracy of all calculations.

You can hoard money by online filing of tax returns because tax software has made the process easy and cost effective whereas tax professionals charge large fees for form filling.

E-filing is an automatic and totally computerized process which helps you to submit your income returns very fast, just in less than 20 minutes and enables you to get a quick and perfect refund with in two weeks. If you forget to file your return until the last moment of submission and get late for the preparation of tax calculation and documents, in this critical time e-file helps you to avoid late file penalties by providing service 24 hours a day; 7 days a week.

Your financial and personal information are safe and secure because during process of e-filing of Tax returns, your data is saved into a file format which has privacy certifications prescribed by the IRS. E -filing provides you complete security and you do not have to worry about your tax returns being lost in the post.

Filing returns by hand is a long process which involves filling up many pages of tax forms. These tax forms are usually received through e- mail. If you are failed to get the forms, you have to collect the forms themselves by standing in long queues to file on time. The process is time consuming and sometimes can be delayed due to errors in calculations and information. In spite of manual filing, E-filing on the Internet enables everyone to create e-file with computer and an internet connection in easy and systematic way.

The first step of e-filling is to generate an account with a user name, and password. After account creation, the system will show you different forms which you have to fill in.
Every step consists of some guidelines which help you what to do from start to end. Always be careful about trustworthiness issues of web site because online filing involves submission of extremely sensitive information through a public network. It is better to contact on the numbers mentioned on the site and ensure that nothing is suspicious about the site.

The corporate payout that shareholders periodically receive--dividends or repurchases of shares--is subject to taxation in many countries. Such taxes make it cheaper to finance investment out of retained earnings than from equity issues. Using tax data from 25 countries over a 19-year period, this paper discusses whether these taxes have a direct effect on investor behavior, and to what extent. Research was conducted by Bo Becker of Harvard Business School, Marcus Jacob of the European Business School, and Martin Jacob of the Otto Beisheim School of Management. Key concepts include:

•    Capital expenditures are higher in firms with easy access to inside equity.

•    High taxes tend to lock capital into companies that generate internal cash flows, ahead of companies that need to raise outside equity. Tax rates do affect investment decisions.

•    Firms with low ownership by corporate insiders are less affected by tax changes than firms with high insider ownership. This may reflect the fact that insiders with high stakes have incentives aligned with other shareholders.

PAN Card is obligatory for all investors wanting to invest in India. PAN is also mandatory for anyone who wants to carry out any transaction in Indian Stock Markets. This is true for any Resident or Non-Resident Indians living abroad, and who wish to make any kind of investment in India, buy any property/house in India, open a bank account in India, open a Demat account etc.

Every person is required to hold only one PAN Card. If any person has been allotted two or more PAN Cards, he/she may keep any one of them and surrender the others through a letter addressed to the Income Tax Officer of the jurisdiction in which his/her income is assesed to tax. It is in fact illegal to have two or more PANs and the penalty for such offence is Rs.10,000.

For example, PAN Card or PAN is needed in the following circumstances:

* Sale or purchase of any property in India
* Opening a Bank Account in India
* Getting a credit card
* Sale of purchase of any motor vehicle
* Bank deposits exceeding Rs.50, 000
* Purchase of securities greater than Rs.1,00,000
* Travel Payments exceeding Rs.25,000
* Demand Drafts exceeding Rs.50,000
* Cheque deposits exceeding Rs.50,000
* Tax deducted at source

PAN Card is on the other hand not needed for those getting agricultural income or for those who do not have taxable income.

on the other hand, it must be noted that not every PAN Card holder is required to furnish income tax returns. The PAN Card holder may have to submit an income tax returns only if he/she has taxable income.

Mutual Fund investments are a great instrument for tax planning which also ensures good returns. In Mutual Funds, a major part is invested in equity and equity-related instruments. Investment up to Rs 1 lakhs is exempted from income under section 80C and dividends received are also tax-free in the hands of the investor. There is no upper limit on investments and long-term capital appreciations are tax free. The only limitations of Mutual Funds are that there is a lock in of three years before which you can not withdraw. But investment should be carefully planned and you should offer sufficient time in selecting the right fund.

There is no income to the investor during the term of the investment. He will get a lump sum amount at the time of redemption or on maturity. Additionally to this, investor gets a dividend from the fund house. There are two options available to the investor:

*      He can cash in the dividends.
*      He can choose for dividend re-investment option.

The most important factor in Mutual Fund investment is the choice of right fund. Check out whether the fund has good performance. Here are some benchmarks to be followed whereas selecting a Mutual Fund for investment. A good track record is no guarantee for future performance. You should also look at some quantitative measures to assess which fund is good for you. Expense Ratio which denotes the annual expenses of the funds, including the management fee, and administrative cost should be lowdown. Superior Sharpe Ratio is better which indicates whether an investment's return is due to smart investing decisions or a result of excess risk. Alpha Ratio which measures risk relative to the market should be optimistic. The mutual fund should have a balance in R-square and ideally it should not be more than 90 and less than 80. Final choice depends upon your risk profile and priorities. You should take an investment decision based on overall financial planning.

Here is a list of top five Mutual Funds for the year 2010.

1.      HDFC Tax saver
2.      Taurus Tax shield
3.      Canara Roboco Tax Saver
4.      Sahara Tax Gain
5.      Reliance Tax Saver