Business Incubation and Bootstrapping Services - a solution for Startup Challenges

A nice article by my dear friend - Anand Nataraj. A must-read content...

Click here to read

Post-incorporation Procedures

What are the procedures to be followed after incorporating / floating / registering a company ?

Click Here for knowing the procedures

How to form a company in India?

It's been a dream for most of us to be an entrepreneur. Those who want to incorporate a company in India can go through my article to have a clear understanding of the procedures.

Click here to read the article

Tax Structure in India


1) Qus. : What are you doing?
Ans.: Business.
Tax: PAY PROFESSION TAX!

2) Qus. : What are you doing in Business?
Ans.: Selling the Goods.
Tax: PAY SALES TAX!!

3) Qus. : From where are you getting Goods?
Ans.: From other State/Abroad
Tax: PAY CENTRAL SALES TAX, CUSTOM DUTY & OCTROI!

4) Qus. : What are you getting in Selling Goods?
Ans.: Profit.
Tax: PAY INCOME TAX!

5) Qus. : Where are you Manufacturing the Goods?
Ans.: Factory.
Tax: PAY EXCISE DUTY!

6) Qus. : Do you have Office / Warehouse/ Factory?
Ans.: Yes
Tax: PAY MUNICIPAL TAX!

7) Qus. : Do you have Staff?
Ans.: Yes
Tax: PAY STAFF PROFESSION TAX!

8) Qus. : Doing business in Millions?
Ans.: Yes
Tax: PAY TURNOVER TAX!

9) Qus. : Are you taking out over 25,000 Cash from Bank?
Ans.: Yes, for Salary.
Tax: PAY CASH HANDLING TAX!

10) Qus. : Where are you taking your client for Lunch & Dinner?
Ans.: Hotel
Tax: PAY FOOD & ENTERTAINMENT TAX!

11) Qus. : Are you going Out of Station for Business?
Ans.: Yes
Tax: PAY FRINGE BENEFIT TAX!

12) Qus. : Have you taken or given any Service/s?
Ans.: Yes
Tax : PAY SERVICE TAX!

13) Qus. : How come you got such a Big Amount?
Ans.: Gift on birthday.
Tax: PAY GIFT TAX!

14) Qus. : Do you have any Wealth?
Ans.: Yes
Tax: PAY WEALTH TAX!

15) Qus. : To reduce Tension, for entertainment, where are you going?
Ans.: Cinema or Resort.
Tax: PAY ENTERTAINMENT TAX!

16) Qus. : Have you purchased House?
Ans.: Yes
Tax : PAY STAMP DUTY & REGISTRATION FEE !

17) Qus. : How you Travel?
Ans.: Bus
Tax: PAY SURCHARGE!

18) Qus. : Any Additional Tax?
Ans.: Yes
Tax: PAY EDUCATIONAL, ADDITIONAL EDUCATIONAL & SURCHARGE ON ALL THE CENTRAL GOVT.'s TAX !!!

19) Qus. : Delayed any time Paying Any Tax?
Ans.: Yes
Tax: PAY INTEREST & PENALTY

Nice One !!

Received a forwarded funny message from one of my colleagues and thought I could share it with you !!

If you have difficulty in understanding the current world financial situation, the following should help...

Once upon a time in a village in India, a man announced to the villagers that he would buy monkeys for $10.

The villagers seeing there were many monkeys around, went out to the forest and started catching them.

The man bought thousands at $10, but, as the supply started to diminish, the villagers stopped their efforts. The man further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!

The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now act as buyer, on his behalf.

In the absence of the man, the assistant told the villagers: 'Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when he returns from the city, you can sell them back to him for $50.'

The villagers squeezed together their savings and bought all the monkeys.

Then they never saw the man or his assistant again, only monkeys everywhere!

"Welcome to WALL STREET"

Rain is a Pain ??

Yesterday, the 24th day of October 2008, I had a terrific experience while returning back to home in the evening. I got a call from home saying that it was still raining, the area where I reside is completely flooded with waters and no vehicle can enter the road. Though I imagined the situation, I thought I could manage.

Scene 1: Raining heavily

Scene 2: With heavy laptop on hand, I was standing inside a crowd where everyone was looking to catch an auto.

Scene 3: No auto-driver was ready to carry us because of rains, water stagnation and traffic jam.

Scene 4: I won at my tenth attempt, a driver came for rescue, but said he would charge 100 bucks (you know, normally it takes 30, but they know that when demand increases, prices also increase).

Scene 5: Thought problem solved, but not really.

Scene 6: Water peeped inside the auto and struck off at one place midway through. He did some magic and got it ready.

Scene 7: Again stopped in few minutes for lack of fuel. Long queue on the nearby petrol bunk, waited for 25 minutes to get the filling.

Scene 8: Since we couldn’t take the direct route considering the road conditions, he showed me the city for 100 bucks and finally reached North Boag Road from where my home is about few minutes drive.

Scene 9: Held up in traffic and couldn’t move a little bit….it was still raining, vehicles were completely mess-up, two staff buses were facing each other blocking the entire road…

Scene 10: After waiting for 20 minutes in auto, paid him the cash and needed to walk down.

Here comes the catch,,,

- water levels on the ground were above my knee levels,
- no space to move here or there
- grounds were already in digged condition for some piping work, hence not sure which way to walk
- Few electrical wires were hanging from transformer boxes
- Many cars were struck on the roads, and couldn’t move back

Though it looks silly, the situation made me to feel whether some thing wrong will happen.

After confirming that my insurance policies are alive currently, I walked in the middle of the road on the drainage-mixed rain waters. Finally, reached home safely though my Franco Leone shoes (worth 2k INR) have lost its life.

Fixed Maturity Plan : Favour of the Season

We have many FMPs from different Asset Management Companies from time to time. It is a very good instrument and offers few benefits which are unique if compared to other debt instruments. I’m pleased to share a detailed product note on this subject to refresh the memory of all.

About FMPs:

FMPs are closed ended funds with a fixed maturity period which could be as little as 15 days or as long as five years. Objective of this investment is to protect the investors against market volatility and generate steady returns.

Working of FMPs:

FMPs are managed as a passive scheme and the fund manager looks to invest money in instruments with maturities corresponding to the maturity of the plan. For example – a 90 day FMP will invest in instruments that mature within this period. The fund manager locks the investments at a certain yield at the time of inception itself which protects the principal and fights against volatility.

They invest primarily in fixed return investments like Government bonds and money market instruments (very short-term fixed return investments) which are almost risk-free investments.

Investment Pattern:

FMP predominantly invests in debt instruments or some high quality corporate papers with a rating, Government Securities, bonds etc.

Advantages of investment in FMP are

a) Fights interest rate risk
b) Fights market volatility
c) Capital Protection

Tax Calculation:

Returns generated by FMPs come under the purview of Capital Gains.

For Short-term: less than a year

If an investor puts money in a FMP of less than one year tenure, then the entire capital gains is combined with the income and is taxed according to the tax bracket the investor falls into. If the investor falls in the tax bracket of 30%, then the returns are taxed at 33.99% (including surcharge and education cess).

For Long-term: One year or more than one year

If an investor invests in a 12 months or more than 12 months series, then he would be taxed at :

10% without indexation
20% with indexation

Who should invest in ?

For investors who are risk-averse and do not want to play with their savings, this is the option. Even those investors who have some money and want to invest for a very short period of time then this is the best option. Investors can also avail tax benefits by investing in a one year plus FMPs which offers indexation benefits, especially in the month of March.

E-mail communications can be considered as vaild evidence:

The new company law which is being drafted by the government is likely to recognise e-mails as a valid piece of evidence. With corporates relying on e-mails for bulk of their communication, the Ministry of Corporate Affairs is planning to recognise electronic communication by corporates as evidence during company law prosecutions.

Regulatory changes in this regard would clear the air on the evidentiary value of electronic communication including emails. With the present law on the subject yet to gain clarity, it is felt that the move would tighten the noose around companies, who often bank upon regulatory loopholes to save themselves.

Officials say that the new company law, expected to be placed in Parliament soon, would provide for necessary changes to this effect. The changes are likely to provide prosecuting agencies a strong hand in their crackdown on matters of infringement of company law provisions.

Under the present law, there is no specific recognition of e-mails as evidence. Officials point out that this lack of clarity has often been exploited by companies facing prosecution. The officials also point out that the basic ground work towards the move is almost ready with the inception of the ministry's e-governance project. The project named MCA-21 has enabled computerisation of documents and records filed by companies.

The new company law has laid substantial importance to both means to check corporate frauds as well as ways to crack them. The government feels that companies should not be let off due to lack of evidence.

It is also learnt that the government at various levels is trying to harmonise related legislation's like Information Technology Act and Evidence Act on the subject, so as to avoid regulatory overlaps.

Even as the company law awaits amendments to this effect, the Competition Commission of India (CCI) feels corporate e-mails could be crucial evidence in cartel investigations. The CCI recommends enterprises to maintain a check on electronic correspondence of its marketing personnel and distributing agents to ensure that they do not engage themselves in anti-competitive activities.

Great Methods of Marketing:


1. You see a gorgeous girl at a party. You go up to

her and say: "I am very rich, Marry me!"

- That's Direct Marketing... "
________________________________________


2. You're at a party with a bunch of friends and see

a gorgeous girl. One of your friends goes up to her

and pointing at you says: "He's very rich, Marry him."

-That's Advertising. .."
________________________________________


3. You see a gorgeous girl at a party. You go up to her

and get her telephone number. The next day, you call and

say: "Hi, I'm very rich, Marry me

- That's Telemarketing. .."
________________________________________


4. You're at a party and see gorgeous girl. You get up

and straighten your tie, you walk up to her and pour

her a drink, you open the door (of the car)"Marry Me?"

- That's Public Relations... "
________________________________________


5. You're at a party and see gorgeous girl. She walks

up to you and says: "You are very rich!

"Can you marry ! me?"

- That's Brand Recognition. .."
________________________________________


6. You see a gorgeous girl at a party. You go up to

her and say: "I am very rich. Marry me!" She gives you

a nice hard slap on your face.

- "That's Customer Feedback..."
________________________________________


7. You see a gorgeous girl at a party. You go up to

her and say: "I am very rich. Marry me!" And she

introduces you to her husband.

- "That's demand and supply gap..."
________________________________________


8. You see a gorgeous girl at a party. You go up to

her and before you say anything, another person come

and tell her: "I'm rich. Will you marry me?" and she

goes with him

- "That's competition eating into your market share..."
________________________________________

9. You see a gorgeous girl at a party. You go up to

her and before you say: "I'm rich, Marry me!" your wife arrives.

- "That's restriction for entering new markets..."

The CFO’s first hundred days

McKinsey Global Survey about Chief financial officers around the world describes their first hundred days on the job as a time when most received guidance, but many had difficulty devoting enough time to their top priorities.

New chief financial officers may not be spending their time where it’s most needed, according to the survey.

Finance chiefs, globally and across industries, report spending most of the first hundred days on budgeting, management reporting, and financial reporting. By contrast, they think that the most crucial activities during that time are understanding the drivers of the business, providing input into corporate strategy, and building the finance team.

Why are there such differences between what they do and what they regard as important?

There is no simple answer to this. One cannot put the clock back. Every day the situation changes, and the responses and actions will have to be tuned to the situation. CFO must be able to assess the business needs and act.

Fortunately for new CFOs, as they respond to their fluid situations most have strong support from the CEO. More than three-quarters of the respondents say that they received explicit guidance from the CEO in the first hundred days on the job, and 46 percent say that the CEO was a mentor. CFOs also are more likely to name the CEO than anyone else as having been helpful in making big decisions early on.

Almost twice as many CFOs credit the CEO with playing that role as credit their finance staff. A majority of CEOs strongly support the CFO’s involvement in strategy; more than half of our CFOs say that the CEO expects them to challenge the company’s strategy, though CEOs see other activities as more important. Nearly 90 percent of CEOs encourage the CFO to be an active member of the senior-management team. This is good news for CFOs, given the ongoing evolution of their role, the increasing visibility of their statutory responsibilities, and their considerable interest in corporate-wide strategic initiatives.

Indeed, nearly three-quarters of the CFOs reported that they would like to be involved in strategy, and those who wished they had spent more time with the CEO say that they wanted to talk about strategy more than anything else.

Finally, relatively few CFOs say that the finance staff would explicitly articulate its expectations to a new CFO. However, when staff members did provide explicit guidance, the CFOs say, their priorities differed from those of CFOs and CEOs. This makes a CFO’s communications with the finance team all the more crucial. A CFO is likelier to communicate with the team ad hoc and in person than in any other way.

Alignment of expectations, nearly four-fifths of the CFOs report that the CEO provided explicit guidance about expectations of the new CFO; CFOs at private companies were significantly more likely to report getting such guidance than those at public ones.

CFOs overall say that the activities the CEO most often describes as important are being an active member of the senior-management team, contributing to the company’s performance, and ensuring that the finance organization is efficient.

Furthermore, more than two-thirds of CFOs say that the CEO expected them to improve the quality of the finance organization, and more than half that the CEO expected them to challenge the company’s strategy.

CFOs overall showed little propensity to make fundamental staffing changes during the first hundred days, though CFOs of private companies were more likely to do so than their counterparts at public ones.

CFOs who planned fundamental changes in financial accounting and reporting or financial planning, budgeting, and analysis (FP&A) were significantly more likely than not to have had formal plans to do so. Overall, FP&A and accounting are two out of the three areas that demand most of a new CFO’s time, as well as the areas where CFOs made the most fundamental changes.

CFOs hired during or after a turnaround are more likely to report that redesigning the finance organization was crucial. Building relationships, most CFOs tell us they communicated widely during the first hundred days, holding regular in-person meetings with the core finance team and the broader finance staff and (in many cases) making themselves available for ad hoc discussions as well.

Interestingly, CFOs who report being satisfied with their performance during the first hundred days are far more likely than those who are not satisfied to report having held in-person meetings with both the core finance team and the broader finance staff.

They also report having more communications overall. CFOs at large companies tend to report communicating across every channel (except broadcast e-mail) more than CFOs at smaller companies do.

CFOs hired at companies during or just after a turnaround are much more likely to report having used ad hoc communications - probably a result of the fast pace and high uncertainty common in such situations. These CFOs are also more likely to have held in-person meetings with the finance staff.

Relatively few CFOs—just over a quarter—report not having enough resources and support to make the transition a success. However, that figure rises to a third among CFOs of public companies.

CFOs who wanted more help most often said they would have liked three things:
- better access to internal information,
- more time with the CEO or the board, and
- the ability to bring new people into the finance organization.

Also, more than 60 percent of CFOs overall report that they would have liked to spend more time with business unit heads. Of the two-thirds of respondents who were external candidates for the CFO role, a majority report that the major challenges during the first hundred days were building credibility and understanding processes.

Letter from a man who married a CA (imaginary one)

SHOULD U MARRY A CA...??

When I told my mom that I wanted a professional woman as my wife, she got me one – “a Chartered Accountant” and I started facing the following problems.

She uses LIFO method while taking out the refrigerated food for cooking. She thinks I am no good at figure work. Fine with me, for now she handles the budget of the house.

Initially she used to send me a bill at the month end, but when I told her that I am not her client but her husband, she asks for the money in advance. The expenses had been rising steadily over the months, so one day I snooped into the papers maintained in a current file. No wonder! She was charging conveyance and overtime to the house budget.

She is crazy, I tell her but she corrects me. "No my darling, I am the auditor." I fail to see the light.

Every scrap of the paper in our house is filed. She tells me as per some Ordinance she must keep a copy of every thing for at least ten years before destroying it. I am worried.

The other day we had an hour-long fight. Later, I got to know that she had charged that hour to a client of hers, in the time sheet. My time was put down as unoccupied.

She says that she loves me and I tell her that I love her too. However, she never believes me. She says that there is susceptibility of it being a misstatement. Duh! She wants my representation on this & opinion of some Expert!

Not a long time back my brother's wedding was to be solemnized. Wedding cards had been sent. After some time I started receiving a steady trickle of letters. I was puzzled until my wife explained that external evidence was more reliable. She had called for confirmations from all those to whom cards were sent.

When she cooks, my wife at times does not go by recipe. Where the recipe says add half-teaspoon vinegar, one tsp black salt or one teacup of water, she ignores them. She says that they are not material when taken in context of whole meal being prepared.

She is crazy, I tell you. Surprisingly everybody calls her an auditor, instead. I checked the dictionary and it did not state that auditor is a synonym for crazy. The dictionary must be outdated.

When we got married, she had given me an Engagement Letter and I had said how cute-how sweet. Now she gives it to me every year saying that her standards state that it must be sent anew if there is any indication that I have misunderstood the objective and scope of engagement. Huh!

Apart from sending me the engagement letter once again, she says I can't get rid off her just like that. She says that she has the right of being heard before I appoint some one else. It seems I must keep reading one local and another English newspaper published and circulated in the vicinity of our house for more details.

Phew! For a minute, I thought that we had jeopardized our going concern status. Duh! Dare I say so?? I am told by one of my female colleagues who is married to a CA that the scenario is even worse when the guy is a CA.

Apparently he capitalised the wedding expenses as preliminary expenses and is writing it off every year.

Also the time he spent dating his wife before marrying her is still under consideration for valuation under AS-26...valuation of intangible assets.
So guys please think twice....should u really marry a CA? And yes please discount it by the appropriate rate to arrive at the present value of the risk of doing so !!!

Is it possible to follow this ???

India India India !!! (Believe it or not)

Do you know that India is the richest country in the world!

Right now, India is the richest country in the world! Wondering how?

It's really amazing.

It's due to Mr. G Vaidyaraj, who donated all his wealth, about which he actually did not know. He is a descendent of Raja Krishnadev Raya from Mysore district.

For the last 300 years or so, three stones were worshipped in his house. But nobody tried to see what it was, except this person, who is a lawyer by profession. One day, when there was nobody in his house, he took the stone out to see what it was that they worship.

Due to the dust deposited on it, from many many years, it looked only like a simple stone. But when he touched it, some portion of the stone was cleansed. And he saw a bright ray of light. He saw something which attracted his attention. And he was amazed when he cleaned all of them. The whole room was filled with light.

He discovered they were diamonds of about 4600 carats each.

He informed the Govt. of India and the news is censored with its security. It's now deposited in a Swiss Bank.

The cost of single diamond exceeds the GDP of USA + UK .

India can buy virtually 7 developing nations.

Even World Bank does not have enough money to buy it.

One diamond costs thrice the debt of World Bank over India .

One such diamond can buy 10 Bill Gates to you.

And the World Bank has proposed the Indian Govt. that it can pay India in Installment if it wishes to do so.

India 's GDP is 34.25 billion dollars.

Bill Gates property is 95 billion dollars approximate so that is the way 'nature changes'.

Our Prime Minister has refused to sell it. He said it will be sold or mortgaged for credit when we need it.

Otherwise right now we have no problems.

You can go through Times of India with a small column on it a week ago.

Star TV presented a 115 min documentary on it about 15 days ago.

The Hindu with its half page article in it.

After that it was censored as classified.
============================
Another good news is that in the Desert of Thar, a deposit of Oil and Natural gas have been found. This stores what Kuwait has in its stomach..

India can go with this ONGC energy reserve with another 30 years.

And moreover it can export it to other counties.

It's incredible!! But true.
============================
An Indian boy in his 12th standard has disproved Einstein's 'Theory of Relativity'.
Shocked? Read on...

Sudarshan Reddy has theoretically proven the existence of a sub-atomic particle, which can travel at speed greater than that of light, thereby challenging one of the fundamental postulates of the 'Theory of Relativity'.

In his recent research paper submitted to the Institute of Advanced Physics (IAP) at Trieste ( Italy ), Sudarshan has proved the existence of a class of sub-atomic particles called leptons', which can travel faster than light. The international physics community is shocked by this discovery.

Dr.Massimo Martelli, President of the IAP has this to say about the paper submitted by Sudarshan. 'After long, careful and critical analysis, I can confidently say that Sudarshan's re search papers show tremendous leap in our understanding of physics. His investigation mounts up on 'leptons'. His work builds substantially on the work of Einstein and others in the field of relativity.'

When physicists from Princeton University tried to measure Sudarshan's IQ with an IQ-meter (at the American Embassy in Delhi ), the meter broke down.

Sudarshan, incidentally, is the brother of Madhu Reddy, the Indian whiz kid who developed an operating system superior to Microsoft Windows.

We should all be very proud of these boys !!

It's better to file physical returns, as online mode is complicated and doubles your work

Salaried individuals these days can pay most bills online. But what about income tax returns?

Salaried individuals and Hindu undivided families (HUFs) can file their tax returns online (also called e-filing). However, it is not compulsory for them to do so. In many cases, it may not even be desirable.

Reason: it can be troublesome.

Consider: Without a digital signature, you still have to go the tax office to submit your forms. It thus doubles your work. Getting a digital signature costs you upwards of Rs.1,000, and even that will work only for one year or two. You have to keep paying for renewing your digital signature.

Two, the government has not bothered to update certain tax changes in the online forms. Thus you may claim mediclaim deductions of Rs15,000, but the site will only allow you Rs10,000.

Three, e-filing is supposed to do away with paperwork. But some provisions in the Income Tax Act have been left unchanged, and thus the taxman may still insist that you submit tax proof (like form 16 given by employers).

Four, even after you have finished filling in the e-form, it may take three or four time to upload it.

To file taxes online, individuals have to log on to https:www.incometaxindiaefiling.gov.in. But don't expect this to be a smooth affair.

After logging onto the website, the right Indian Income Tax Return (ITRs) form has to be chosen. There are eight ITRs from which you will have to choose the one that applies to you.

For most salaried individuals, ITR-1 will do as long as they don't have any capital gains or income from house property. For those who do, ITR-2 is the form to fill up.

Once the relevant form has been identified, it has to be downloaded from the following link https:incometaxindiaefiling.gov.inportalindividual_huf.do. This form is an excel file.

There are certain glitches in the ITR 2 excel form. For the financial year 2007-08 (or assessment year 2008-09), the maximum deduction allowed for paying mediclaim premiums under Section 80D of the Income Tax Act was Rs15,000, and Rs20,000, in case of senior citizens. This form it seems hasn't been updated.

"The column for mentioning deduction under section 80 (D) pertaining to mediclaim deductions doesn't accept an amount above Rs10,000, in spite of the fact that the deduction limit was increased during Budget 2007 to Rs15,000 for individuals and Rs20,000 for senior citizens," says Paras Savla, a chartered accountant who runs Paras Savla & Associates.

It allows a deduction of Rs10,000 and Rs15,000 for senior citizens, as was the norm for financial year 2006-07 (or assessment year 2007-08). Therefore, if you are a senior citizen paying a mediclaim premium of more than Rs15,000, the maximum deduction this form will allow you is Rs15,000.

The form needs to be filled up with the help of Form 16 (given by your employer). Once the form has been filled up, it needs to be saved as an XML file. You don't need to be an expert for this. The form has a "generate -XML" button in-built into it. After this you need to create a user ID and password. The user ID is actually your income tax permanent account number (PAN).

After logging in using the user ID and password, you will have to click on the submit return link on the home page of https:www.incometaxindiaefiling.gov.in. While uploading the file, you need to encrypt the file using a digital signature. A digital signature ensures that no one else files your return.

After you have encrypted the file, you need to upload it. A digital signature is essentially a file which needs to be installed on your computer. When e-filing the return, portions of this file need to be pasted at specified places in the form.

There are various intermediaries in the market who issue this signature. Some of the intermediaries are MTNL CA, TCS, etc. Depending on which intermediary you approach, the digital signature can be obtained for a period of one or two years and usually costs above Rs.1,000.

This makes the entire process of filing income tax returns online relatively more expensive.

Fees for physical filing of tax returns differ from one chartered accountant (CA) to another. The fees range anywhere between Rs.300 and Rs.2,500 for ITR1 and ITR2 depending on the complexity of return filing. So if you just have salaried income, e-filing really doesn't make sense.

If you don't have a digital signature, you can still file an e-return, but you have to submit a hard copy of the completed return to your tax office within 15 days after that.

Once the file is uploaded, the ITR-V form is generated and this is the proof of you having filed your return.

Without a digital signature, you need to print out two ITR-V forms. One has to be submitted to the tax office and the receiving clerk or officer will stamp and return the other one for your records.

This is where the entire process of filing a return online weakens. If a visit to the income tax department is necessary, then one might as well fill up the entire form manually.

Nevertheless, it does help in case of individuals who have bulky tax returns. "We save a lot of paper, while filing returns electronically. Earlier, for assessees whose TDS (tax deducted at source) was high, we had to take prints of at least 20-24 pages, sometimes even 100 pages.

But with the e-filing, only two copies of a one-page return are enough," says Sumanlal Lodaya, chartered accountant who runs SS Lodaya & Associates. There are other issues also with e-filing. "Sometimes you have to submit the returns three-four times for it to be accepted. In my area there is load-shedding for three-four working hours. So, though one can file returns post-working hours as well, in CA offices the staff is not available later on to file returns online," says Salva.

If one has to follow the Income Tax Act in its true letter and spirit, e-filing is a 'defective' way of filing returns. The explanation accompanying Section 139(9) of the Income Tax Act clearly states that any return that is not accompanied by annexures, TDS certificates, etc, is 'defective.' "Using this loophole in the Act, the taxman can insist on physical documents for verification after you have e-filed your return," says a CA who was unwilling to be named.

Given these reasons, it is best to physically file your income tax return rather than go the e-way.

Filing tax? Take your documents along

IT officers may ask for the same while filing.

Nearing July 31 and it is time to file the income tax return (ITR).

By this time, you may have received Form No 16 and be ready with your tax calculations in order to file the annual income tax return.

Even though the ITR forms have instructions, which clearly state that there is no need to submit any supporting document, it is in the interest of the assessee to carry the documents along.

DNA Money had earlier reported that income tax offices in Mumbai have not been accepting ITR forms unless these are accompanied by the relevant documents.

This is contrary to the existing regulations.

Instructions from the finance ministry state, "No document (including TDS certificate) should be attached to the form. Officials receiving the return have been instructed to detach all the documents enclosed with this form and return the same to the assessees.

This has been applicable in the assessment year 2007-08 and will now be applicable in the current assessment year of 2008-09 as well.

But, the tax officers are finding it difficult to process the information without the documents, especially tax deduction at source certificates.

It has been learnt that the IT department has been in touch with those who had filed returns last year without the supporting documents.

While going to file the ITR at the designated income tax office, make sure you have the TDS certificates, house rent receipts and investment proof for both the current financial year and previous ones ready at hand.

Those who have plans to discard old documents must make sure the old pile doesn't contain the TDS certificate on 2007 fixed deposits. Also, if you are planning not to collect the TDS certificate, education expense receipt, house rent receipts or agreement just because you no longer have to submit them, think again.

May be the tax officer in your city will accept the ITR forms without documents, but only to knock your door the next day. In effect, the IT department has shelved its burden of document storage on the tax assessee.

Good Lesson:

One of my colleagues recently lost his wallet while driving. He immediately called me up to check what needs to be done. I asked him to block his Debit and Credit Cards quickly and to request for the issue of new cards. He did the same without any delay. Also, I contacted ICICI Lombard to issue duplicate mediclaim card for him. And when he came to office, he applied for a duplicate PAN card by paying the appropriate fees online.

After 4 days, he got a call in the early morning from someone who claims to be the finder of his wallet. It seems that gentlemen tried to reach my colleague several times, but the latter did not pick those calls thinking that they were marketing calls from banks for loans / credit cards etc. This is because he has been getting annoying calls from various banks and hence, he doesn’t pick the calls from unknown numbers.

Though he got his wallet back, he ends up paying charges to all his bankers for issue of duplicate debit and credit cards, processing fees for duplicate PAN card, apart from facing mental stress and disturbances.

The lesson what we all can learn from this incident is that we should pick all incoming calls (for few days at least) if the wallet is lost. Who knows it might be from the finder of your wallet ?

The thing to note is that the gentleman who found my colleague’s wallet was ready to meet him and hand over it. How surprising it is that someone who finds your wallet tries many times to reach you, and when he gets you, he asks where should he come and hand it over ? In this fast-moving world with everyone having there own busy schedule of activities, it’s very difficult to find someone with helping tendency like this. Isn’t it ?? We should be like this, in case we find someone’s missing stuff.

Another thing, needless to say, is that the incoming marketing calls from banks are increasing day by day. The “Do Not Disturb” Registry is also not effective to a large extent. These marketing people simply say that they found our number on their data base and disturb us a lot. And that too, some times we get repeated calls from the same office and they are answerless if we question it. Quite painful !!

Few interesting facts:

The word budget's root word is the French word BOUGETTE, a little bag, once used for pills and medication.


Tight security: Almost 30 employees of the Finance Ministry press stay inside the ministry building for a week ahead of the Budget presentation. They're not allowed to communicate with the outside world. This is done to ensure that information from the Budget is not leaked out.


Morarji Desai was the only Indian Finance Minister to have presented two budgets on his birthday, February 29, in 1964 and 1968.


The world's first documented imprisonment for tax evasionwas in 306 A.D. by Emperor Constantine of the Holy Roman Empire.


The world's first income tax was levied in 1404 A.D. in England (it was so hated that Parliament later had all records of it burned).

A young man went overseas to study for quite a long time. When he returned, he asked his parents to find him a religious scholar or any expert who could answer his 3 Questions.

Finally, his parents were able to find a scholar.

Young man: Who are you? Can you answer my questions?

Scholar: I am one of God willing, I will be able to answer your questions.

Young man: Are you sure? A lot of Professors and experts were not able to answer my questions.

Scholar: I will try my best, with the help of God .

Young Man: I have 3 questions:

1. Does God exist? If so, show me his shape.

2. What is fate?

3. If Devil was created from the fire, why at the end he will be thrown to hell that is also created from fire. It certainly will not hurt him at all, since Devil and the hell were created from fire. Did God not think of it this far?

Suddenly, the Scholar slapped the young man's face very hard.

Young Man(feeling pain): Why do you get angry at me?

Scholar: I am not angry. The slap is my answer to your three questions.

Young Man: I really don't understand.

Scholar: How do you feel after I slapped you?

Young Man: Of course, I felt the pain.

Scholar: So do you believe that pain exists?

Young Man: Yes.

Scholar: Show me the shape of the pain!

Young Man: I cannot.

Scholar: That is my first answer. All of us feel God's existence without being able to see His shape... Last night, did you dream that you will be slapped by me?

Young Man: No.

Scholar: Did you ever think that you will get a slap from me, today?

Young Man: No.

Scholar: That is fate my second answer...... .. My hand that I used to slap you, what is it created from?

Young Man: It is created from flesh.

Scholar: How about your face, what is it created from?

Young Man: Flesh.

Scholar: How do you feel after I slapped you?

Young Man: In pain.

Scholar: That's it... This is my third answer, Even though Devil and also the hell were created from the fire, if God wants, the hell will become a very painful place for devil.

God said: "If you are ashamed of me, I will be Ashamed of you." If you are not ashamed, pass this message on...only if you believe.

Isn’t it smart ????

'A Leader Should Know How to Manage Failure'

(Former President of India APJ Abdul Kalam at Wharton India Economic forum, Philadelphia, March 22, 2008)

Question: Could you give an example, from your own experience, of how leaders should manage failure?

Kalam: Let me tell you about my experience. In 1973 I became the project director of India's satellite launch vehicle program, commonly called the SLV-3. Our goal was to put India's "Rohini" satellite into orbit by 1980. I was given funds and human resources -- but was told clearly that by 1980 we had to launch the satellite into space. Thousands of people worked together in scientific and technical teams towards that goal.

By 1979 -- I think the month was August -- we thought we were ready. As the project director, I went to the control center for the launch. At four minutes before the satellite launch, the computer began to go through the checklist of items that needed to be checked. One minute later, the computer program put the launch on hold; the display showed that some control components were not in order.

My experts -- I had four or five of them with me -- told me not to worry; they had done their calculations and there was enough reserve fuel. So I bypassed the computer, switched to manual mode, and launched the rocket. In the first stage, everything worked fine. In the second stage, a problem developed. Instead of the satellite going into orbit, the whole rocket system plunged into the Bay of Bengal. It was a big failure.

That day, the chairman of the Indian Space Research Organization, Prof. Satish Dhawan, had called a press conference. The launch was at 7:00 am, and the press conference -- where journalists from around the world were present -- was at 7:45 am at ISRO's satellite launch range in Sriharikota [in Andhra Pradesh in southern India]. Prof. Dhawan, the leader of the organization, conducted the press conference himself.

He took responsibility for the failure -- he said that the team had worked very hard, but that it needed more technological support. He assured the media that in another year, the team would definitely succeed. Now, I was the project director, and it was my failure, but instead, he took responsibility for the failure as chairman of the organization.

The next year, in July 1980, we tried again to launch the satellite -- and this time we succeeded. The whole nation was jubilant. Again, there was a press conference. Prof. Dhawan called me aside and told me, "You conduct the press conference today."

I learned a very important lesson that day. When failure occurred, the leader of the organization owned that failure. When success came, he gave it to his team.

The best management lesson I have learned did not come to me from reading a book; it came from that experience.

Trip to Vellore:

I was invited for the marriage of one my ex-colleagues' brother, which was scheduled to be held in Vellore on 10th of Feb 2008. Since I wanted to attend the marriage and also to visit the Vellore Golden Temple , I decided along with other friends that we could make it.

After thorough and repeated checks, finally it was clear that me, Hari and Deena can go from Chennai. Sai and Raju directly from Bangalore. The plan was confirmed only on the previous day of marriage and hence, we didn’t have any choice except to take a bus to Vellore (in fact, the headcount was less otherwise we could have taken a cab).

We planned to be at Koyambedu Bus Station at 7 p.m. Thanks to the traffic condition in Chennai (being a ‘Muhurtham’ day), I was able to reach at 7.05, Deena at 8.00 and finally, Hari at 9.00. Good thing happened was that, since I didn’t want to waste my time waiting for friends, I got the book “The monk who sold his ferrari” from a book shop over there and was able to complete about 30 pages before Deena reached.

We took a bus to Vellore at about 9.10 p.m. We couldn’t get together-seats to sit. Also, we were jam-packed by passengers who surrounded us by standing, by sitting and by laying on the floor very next to us and scratching purposelessly. So, the journey was that ‘pleasant’ :-).

Reached Vellore at 12.30 and got an auto to reach the Hotel. Surprised to see that Sai was waiting to receive us. And, in fact he helped to wipe off our hungry by offering a biscuit packet which served as a dinner. We slept at about 2.30.

Since weekends are nightmares for visitors, we decided to visit the temple in the early morning itself. So, we got up at 4 a.m. and left at 4.30 a.m. to temple. But surprised to note that the temple gate opens only by 8 a.m. We waited till then enjoying the hilarious conversation with Sai.

To talk about temple, Wow, it is awesome. I could say that the founder “Sakthivel” has really done a wonderful thing which is highly impossible for a normal man. Tonnes and tonnes of shining Gold, amazing workmanship, highly decorated and neatly maintained gardens,,,, ooof, we should be proud to tell the world that we got something like this….marvelous… Everyone must visit this temple once in a life time.

We then attended the marriage. Met CEO of ‘Arusuvai.com’ Babu and few of his friends. We caught the bus at 2 p.m back to Chennai.

Quite a short and memorable trip…..