My Biggest Financial Mistake in 2010

by Vinaya HS on January 6, 2011

in Finance

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I simply can’t believe that I made such a stupid mistake.

Recently, when I changed my job, I ensured that I obtained the final salary settlement statement from my previous employer well before I joined my new job. That was good thing because I was able to submit this statement during the joining formalities at my new employer. And then I completely forgot about it. I didn’t verify even once my income tax computation over the four-odd months that I’ve been at my new job.

Come January, when I received an email from payroll asking for proof of investment for income tax savings, I sat down to take a look at the latest income tax computation. And to my utter horror, the income from my previous employer hadn’t been included in the income tax computation.

I immediately crunched numbers in an Excel spreadsheet and to my dismay I discovered a huge gap in my income tax liabilities. If my calculations are correct, I owe additional income tax somewhere in the upper five figures and this will be deducted from my salary over the next three months.

Ouch!

Last financial year, this ruling ruined my salary.

This year, my own stupidity is going to ruin my salary. With all the goals that I’ve set for 2011, it’s going to be one tough ask.

Another lesson learned the tough way.

When you change your job, make sure that your new salary and income tax computation also include the figures from your previous job.




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{ 2 comments… read them below or add one }

Boomboom January 6, 2011 at 12:50 PM

Yes I guess this was a grave mistake. Last year I changed my job in December but the improper process followed at my new job, the previous employment details was not included and I ended up paying a huge Income Tax during the time of filing. Hope you have a much better 2011.

Girish January 6, 2011 at 10:22 PM

Hello Vinaya,
Is it not possible for your Finance to
recompute the tax combining your earnings in your previous company?
I feel the finance can recompute and rectify to some extent based
on the proofs..
Hope u had submitted the proofs at your previous company for the months u were with that company…
I also had face it when I had shifted jobs previously.
I had got standard deductions in both the companies.
Then after submitting the old company details the new tax was recomputed and I paid the additional tax.
Regards,
Girish

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