Indian taxpayers fill in their income tax returns at a special income tax filing facility at Pragati Maidan in New Delhi, July 29, 2007. There was a last minute rush to file income tax returns with a deadline of July 31.
Shehnaz Pardiwalla is slowly beginning to recover from the nightmare of the past fortnight. The young chartered accountant had lost her appetite and foregone sleep in the run-up to the July 31 deadline for filing income tax returns. Not that her personal papers were not in order. It is just that CAs like Pardiwalla dread this time of year when they must deal with disorganised clients who do not understand the significance of filing.
Yes, we know the deadline is over, but admit it! You had happily shoved the three-letter-word into a memory recess and havent yet filed. Well, its not too late. You can file the return till March 31, 2008, without attracting any penalty as long as you dont have any outstanding tax to be paid. That means, salaried people need not worry as their taxes are deducted at source. However , if you have other sources of income, you will have to pay 1% per month on the outstanding tax liability.
The tax professional's wishlist for individual tax payees and companies that employ them:
Maintain details of bank deposits and withdrawals
Record sales details of shares and acquisitions
It is incorrect to believe that all mutual fund redemptions are not taxable. Some are
Keep records of investments made in PPF, NSC and LIC
Proper vouchers must be prepared of all expenses. You cannot brush them off as miscellaneous expenditure
Companies can help by issuing salary certificates in advance so employees can beat the last-minute rush And, your reason to file taxes is not just to add more paperwork in a government department that you scarcely care about. Its because having your financials on record come in handy, even for things like applying for a foreign visa.
Yet, year after year, its the same old story. People do not organise their salary certificate, bank statements and investment details in time for the big day. One can imagine the plight of the CA who must first send out repeat reminders of the approaching deadline to a hundred-odd clients, draw out individual checklists of required documents, and then go through them with a magnifying glass to see if they are in order.
Interestingly, it is people in the 35-40 age bracket, holding well-placed jobs who are often the most financially dysfunctional. They are more carelessor simply truantas compared to the previous generation. The rise in disposable income means that wellpaid youngsters, even if they are starting out in life, do not need to prepare a budget or keep track of their expenses . Naturally then, bank statements and other documents are carelessly put away somewhere the minute they arrive.
It is only when the person needs to file his returns in July that they are hurriedly assembled.