To My CA, with Love

All you need it a little planning and a shoe box, says wealth manager Sujata Kabraji


It's an annual nightmare. The month of July ends up being stressful for most individuals and their chartered accountants. The solution? Organise yourself better. April-May is when you really should start tidying up those drawers. Here are some tips and tricks to help you through!!


Bank statements/pass books
Muster up some courage, get hold of all your bank passbooks and statements -- from April last year to March this year -- and put them in order. Against each entry, debit and credit, in pencil, write down where the money came from, and where it went – legibly, if possible! If you’re lucky, your bank statements will include the narration for each entry. Otherwise, good luck with tracking the cryptic notes in your passbook and your pay-in slips. Don’t forget to hound your bank to improve on this for next year.

PPF/ELSS/life insurance
If you’ve been savvy you should have taken advantage of the section that allows you to invest Rs 1 lakh and get a tax break, but your CA needs proof. So get that PPF passbook updated, keep the LIC receipt handy, get the mutual fund ELSS statement and pin them together.

Health insurance
You also get a break for paying your medical/health insurance premiums. Once again, no escape from providing proof, so get that policy receipt out. If you pay for your dependant parents, then add that to the pile.

Proof of earnings, Form 16
This one is easy for some and harder for others. If you are salaried, start hounding your accounts department and your bank for Form 16 from the end of April. They can be notoriously slow in producing this crucial piece of paper.
If you are self-employed, you need to be especially well-organised. If you don’t use some of the excellent software accounting packages commercially available, then just use good old Excel on a daily basis to log your income and expenses, including petty cash. All details are essential. This should match with your bank details. If anyone had deducted tax at source, you need to get the tax certificate and, again, this needs you to start bugging them right away.

Income from other sources
Dividends / interest: These will reflect in your bank statements. But your CA is obliged to check with the actual warrants that they are, indeed, what the narration in your bank statement says. So perhaps you can have a shoe box in which you can dump these slips and then in April, sort them out chronologically. As my CA says, “I need details not a shrug and a ‘why bother-it’s not taxable!’”. Where interest earnings are concerned, TDS certificates are a must.

· Capital gains/losses: When you sell your financial assets, you make a profit or, if unlucky, a loss. The tax man needs to know. And to give the devil his due, you do get a tax break if you make a loss, so it’s in your interest to document it. You can also index your profits, which lowers your taxable profit.

• What your CA needs from you is: Date of purchase, purchase price, purchase quantity, bank account details from which the payment was made. Any taxes, cess paid on the purchase will be added to your cost. Similarly, you need the date of sale, sale price, sale quantity, bank details where the money went in. Any taxes , cess paid will be deducted from your sale price.

The paperwork to support the above is essential--contracts, bills, statements etc, most of which you can get from your broker. Your CA has to verify everything.

Current status of investments
Make a list of all your investments, with values, as on March 31, and have the statements to back this. It’s not that hard to do. Ditto with your demat account, your PPF account and so on. Jot all this down on a piece of paper.

House rent or asset sale
Many of us have housing loans, and can get a tax break from this. You need a certificate from the loan institution with the interest and principal amounts paid duly certified and outstanding amount as on March 31. Some of us earn rent from a property. Start culling corporation rent receipts, bills for repairs on a rental house.

Now if you really want your CA to be your new best friend, put all these bits and bobs of paper into plastic envelopes, name them with appropriate names like Section 80C, Section 80D, Form 16 and hand over with a smug smile!