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... And here's why
Harsh Rege, 28, had done it before and was doing it yet again!
The eleventh hour rush, this time round he was frantically rushing things on the July 21 for filing his taxes.
Well, when you do things the last minute, they aren't pretty!
There were numerous nuances that had to be taken care of; the first one being which Income tax return to fill out.
The worldwide web has immense data availability; a quick search revealed that there were the following forms applicable for individuals.
He aptly searched his mind and concluded that ITR 1 is what is applicable to him, without much ado he brought out his two Form 16s (indeed, for a restless person like him, job hopping was fun!
So, two Form 16s; one from his previous employer and one from the current employer).
He overturned the Form 16s and one of them had a refund, his eyes gleamed at the thought of having more dough to party!
He quickly brought himself back to reality.
Now he needed HELP to fill out the form.
He decided to call up his best friend who dabbled in tax only to be told that he was out of town and could help him only when he returns. Another spanner in the wheel, thought Harsh.
The next day his friend called Harsh and both of them scratched their heads to figure out how he could go about claiming the refund.
Harsh thanked his friend for his timely help but then again there was a small hitch.
Tax refund or tax payable?
He was in for a surprise, when his good 'ol friend informed him that there would be no refund.
On the contrary he may have a tax payable scenario. He passed on an auditor's number from whom he could avail some help.
Harsh dropped into the auditor's office, who after doing some number crunching informed him that he indeed has to pay tax!
This was due to the fact both the companies had provisioned for the exemption limit individually and hence, one needed to club the income to arrive at the net tax payable, given that the exemption limit is applicable only once.
More tax to pay!
Now, he had to pay the self-assessment tax in a bank, that's when he promptly realised that he had interest income as well for which he had to drop into the bank for Form 16A.
The auditor informed him that the tax payable would further go up, given that the bank does a TDS (tax deduction at source) of only 10.3 per cent, but interest income is taxed at normal rates.
Voila, all his party plans went kaput, now he had to shell out additional money.
He got the Form 16A from the bank and handed it over to the auditor. He had already consumed ample time of the auditor and the auditor has now become a bit pesky about Harsh's carelessness.
Now he had to revise his calculation. But before that the auditor handed over the checklist to ensure that all the data was in place.
Filing tax on your own? Better have these
The checklist read:
Apart from the Form 16 issued by the company there are a couple of other documents which would be pertinent.
Here's a brief list of what would be required to conduct your tax filing:
- Form 16 (received from employer/s)
- PAN copy
- Form 16A (where TDS has happened incase of term deposits, consultant income)
- Summary of all bank statements
- Details of capital gains, rental income
If you have business / consultant income and claiming certain expenses, then the vouchers / bills should be in place.
Harsh suddenly remembered that he had dabbled in stocks as well, during the previous year.
He called his broker for the transaction statement, promised the auditor, that this time round he would have all the documents in place. He made trips to the demat office and eventually got hold of the transactions done during the year.
Surprise, surprise. More surprise!
Harsh finally got all the documents together and got the computation done.
Post computation, he was in for more surprise. There was tax payable and penal interest had also kicked in for non-payment of advance tax and not clearing off his taxes prior to March 31, 2009.
Every month one per cent interest was getting added, which by now had become a sizeable amount!
Given that capital gains had come into picture, he was now required to fill out ITR2. He paid off his self-assessment tax and prepared to file his returns on the D-day: July 31, 2009.
This time, he was determined to do the entire process by himself, so that he would know how to go about things the next time round. He reached the venue early in the morning, thinking he would finish this Herculean task in about two hours and get back to work peacefully.
Well, well nothing worked his way till now and it was only natural that this would not work too.
There was a long queue. He smiled, drawing some consolation from the fact there were many others like him who had dashed to hit the tape at the last moment.
The final hiccup... but all's well that ends well...
He befriended a person whilst he stood in the queue.
Amidst the conversation he realised he was not carrying a copy of his PAN card. Now what? He could not leave the queue and come back for the queue had grown really long.
He called home and arranged for someone to carry the PAN copy.
Finally, he called office, took the day off to finish the tax filing process. Finally, he got the acknowledgement stamped, neatly filed all the documents including detailed calculation of taxable income and amount of tax payable, self assessment tax challan, Form 16As, Form 16 and of course, the income tax returns acknowledgment!
As he headed back, he vowed that next year he would be more organised and will surely get his tax filing done much prior to the final date: July 31.
Anil Rego is the founder and CEO of Right Horizons , an investment advisory and wealth management firm that focuses on providing financial solutions that are specific to customer needs.