The salaried individual today begins earning at about 21 years of age. Every such individual wants a high salary; is willing to jump jobs for higher pay. But how many know exactly how much they earn? What each component of their salary means? Can they define CTC? Do they know if they are eligible for reimbursements and leave travel allowance?
How many individuals understand income tax? The numbers, the percentages, the nitty gritty? Do they understand the reason companies insist on declaration at the beginning of the financial year versus filing for returns? Why does one have to pay professional tax? What is TDS?
I claim to understand about 50% of the whole deal. I still don't know if I'm doing the best I can to save tax, or if I'm claiming all the money I am eligible for. Every HR session on these topics is filled with ambiguity and the irritation of non-specific details. For some reason, I haven't found a website that explains to me what tax is (in dummy-level terminology), and how it works - probably no website will, because what I need is a sit-down session customized to my needs. Is the answer a professional tax planner even for middle class salaried people?
I am amazed at how happily ignorant I was a few years ago, and have let my money slip through my fingers because:
- I did not get my PF transferred when I changed jobs
- I did not declare my savings and did not file for returns (everyone said, oh IT people, it is hell to get your money back!)
- I did not best utilise the reimbursements I was eligible for
Note to self and warning to all: Before you run to the shop to buy more butter, look at the butter that's melting on the table in front of you!