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When to take help of accountant for filing income tax return
January, 28th 2019

Nayan is a regular investor but he is often left perplexed by all the paperwork he has to do while filing his income tax returns. He finds it a cumbersome exercise that requires a lot of information gathering. So he ends up filing the return based on the Form 16 provided by his employer, as salary is his primary source of income. He finds it easier to take care of interest earned on deposits based on the TDS certificate issued by his employer. The rest of his investments in shares and mutual funds are tough for him to manage for tax purposes. What should Nayan do?

If Nayan has investments in equity and mutual funds, it would make sense for him to take the help of a chartered accountant to keep his accounts and file his tax returns. Equity transactions may create short-term capital gains that are taxable. There may be capital losses that are eligible for set off. Mutual fund transactions may have short and long-term capital gains that are taxable. Nayan may not be complying with the tax laws if he does not account for and pay taxes that may be due.

Many service providers and brokers provide periodic statements showing tax liabilities from equity, debt, mutual fund and derivative transactions. Nayan should subscribe to these services and use these statements after due verification by his CA, to ensure that he is paying the right amount of taxes. The tax on these heads of gains from investments are not subject to TDS. So he may have to fill up the required tax challans and pay the taxes as applicable.

Nayan should consolidate transactions in investments with one or two investment advisory services. Dealing with too many of them may make it difficult to bring all transactions to book at the end of the year. Non-payment of taxes may lead to fines and penalties if his returns come up for scrutiny. The costs paid to keep accounts and books in order might turn out to be lower in comparison.

 

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