Mumbai : It is not a rocket science to protect, preserve and retrieve decades old personal papers within minutes, said PR Balan, Chief Mentor of MFA Consulting Pvt Ltd. He said this while speaking at a special seminar on ‘Sail through tax scrutinies with watertight documentation’ organised by Moneylife Foundation in Mumbai.
“Protecting, properly preserving and quickly retrieving decades old personal papers within minutes is not a rocket science or magic. Anyone can do it by following simple methods systematically and regularly. However, while doing so, we must understand the importance to locate and discard old and non-relevant documents,” added Balan.
Balan stated once you discard irrelevant old documents, what you will get is most relevant and important set of documents. “When we talk about preserving tax papers, many see this as a pain. Especially for tax scrutinies, there could be reasons like anxiety, fear, stress or tension behind this. However, this should not become a hindrance in maintaining and preserving tax records,” he added.
Commenting on digital, Balan highlighted that digital revolution makes people feel that they can manage without papers. “So they allot less or almost nil quality time for paper management. Many even have a wrong notion that they can ‘manage’ any situation. In addition, our educational curriculum does not emphasise on documentation – rather ‘paper management’. This needs to be drilled in every child’s mind.”
During a scrutiny from Income Tax (I-T) department, many taxpayers assume this to be painful. Balan reasoned this trouble is mainly due to poor paper management by taxpayers. He also pointed out that some may not be paying adequate attention on tax matters, while few may not supply complete information to their Chartered Accountants (CAs).
Balan recommended that taxpayers should hold only two accounts – one for business or professional purpose and other for personal transactions. He added, “Keep printouts of bank statements in a separate files or one file with dividers for different accounts. Maintain your bank statements in chronological order – in voucher or cheque number sequence in the same format as the bank passbook – but with clear details of payee’s name, purpose of payment, date of issue of cheque, and date of debit by the bank. If you make it a habit, it will have tremendous advantages.”
Highlighting importance to discard unwanted documents for preserving important ones, Balan said, “Many people say ‘I have all the papers from 1970 onwards’ – this is the problem. In addition, it is a wrong notion that preserving or maintaining documents is a job of an office boy or filing is below one’s dignity. Do it yourself. It has tremendous advantages, like you will exactly remember which document is kept where.”
