Tax Planning for a Software Professional (30-40lacs)

1) Being an IT professional, your receipts over 10 lakhs needs your accounts to be audited by CA. You have no choice but to find time for that. However, as your income is too good (according to you) and you really have no time for this, it may be cost effective for you to ignore your obligation now and pay interest and penalty later. You apparently seem confident to earn it. Only it will not be allowed as an expense to you.

2) From 36 lakhs, 22 on Bungalow without loan, 10 in SB for new car and 5-6 for expenses on household. Where did you get extra 1-2 lakhs from. Generated in black or from interest? It seem you have no business expenses. Therefore your entire 37 lakhs can be offered for tax and you can pay the interest for default in payment of advance tax and self assessment tax extra.

3) I can only recommend to you to fulfil your tax obligations and compliance. If you do not get it audited, even though you can afford to and will pay the penalty, AO will call an auditor at your cost to audit and then proceed with all the disallowances that will come up. In your case as you have no professional expenses, you will not have that problem. For you it is only just a matter of finding time to go to a CA.

Ok got you.

And yes, I have a lof business expenses. I just gave an example . Dint count it as a perfect number. LOL!

So, better to goto the CA and show him all of expenses and all.

Here is a list of my expenses in general,

Car Loans : 16,000 / each month.
House Rent : 8,000 / each month
Broadband : 4,000 / each month
Official Expenses : 40-50,000 / each month
Salaries: 36,000 / each month
Household Grocery : 7,000 / each month
Car Fuel : 5,000 / each month
other Expenses : 20,000 / each month.
New Home Loans from this month : 32,000 / each month

So, all this has been and are paid from this same money only.

And dude, as I said, there is no BLACK term involved. I just gave a rough figure. Thats all.

Dude. I have come across more than a dozen of your types who donot like being bogged down by these tax compliances and would rather earn tax + interest + penalty and cough it up when it comes up. I do not know their status yet as all of them have landed up in USA with H1Bs. By now whatever demands the department has on them must be loose change.

Im not going to land there, as my family is here. :)

So, I will better file the tax promptly and clearly with my CA and do everything correct.

So, am I thinking it right or still not cool ?

It is not too late. You earn then you need someone to keep things in order and you earn more to keep paying these someone's. What you need in addition to your CA is an experienced accountant handling Tally who does your accounting and compliances with all acts like professional tax and VAT / Service Tax. Your CA is your merchant of good nights sleep as far as your financial matters are concerned. You will have to respect him / her and do not consider your CA to be a one stop shop for your accounting too and expect him to do mundane tasks of accounting. Their job is too specialised for this and you should look after this work internally. Then everything will be allright and in order.

Hmmm..

So you recommend to keep an Accountant here at my office to manage and generate all the records, payments, transactions,etc ??

And then goto CA with records,etc and ask him to start planning for me ?

Well, how easy is to get an Accountant ? And whay salary will be good for a personal accountant ?

I dont see any hard stuff, but just keeping records, scanning and printing slips,etc and keeping records in tally, bla bla bla..

If you can do it yourself then also it is OK. You seem to be hard pressed for time working for 22 hours. Your accounts have to be audited and you have to comply with many laws. Therefore kep a person who can maintain for you the accounts in tally and also do mundane compliance tasks. However, some CAs may help you engage an accountant and oversee what he does so that you do not go wrong.

NA NA NA!

Lol, Im already stressed and if I start this, then I have forget everything and start learning CA with my wife. She is doing CA doing now and she is my future Accountant, CA everything for my company.

HE HE!

Ok, I will ask my CA to get me one of his accountant for me and I will pay him a salary for that.

What do you think, will be a good salary for an accountant to manage an individual's accounts ?

It depends on where you are. If you are in South Mumbai or comparable localities in other cities, depending on what you want to do a regular accountant would cost upward of 12K / month. However if you find that stiff you can consider a part time. There are  many highly qualified and emploayble house wives who are unable to take up full time employment as their children go to school etc. but as they want an independent source of income they consider working part time. The only hitch is they do not travel too far from where they live. One of my friends set up a back office around the residential areas and he is running office full day with half a dozen part timers overlapping by an hour. At anytime he has 3 such employees in the office and the amount of work they do collectively is quite smart. It all depends on your need. Maybe you can get away with a part timer coming for 4 - 5 hours.

Yeah yeah..

I need a Part Timer only, as Im not Tata Birla or Wipro, who will need a professional experienced Accountant and pay hil big salary.

Will talk to my CA tomorrow.