Haven’t Paid ITR & Clueless about CIBIL. Please assist!

POSTED BY Abhishek Dwivedi ON February 20, 2013 6:05 pm COMMENTS (18)

Hi guys,
Found this forum yesterday and figured I’d ask you guys about my issues.

I’ve been freelancing casually for over 2 and a half year now. 100% of my income is in USD and have done close to $60,000 to $70,000 in this revenue in 2.5 years to far. I haven’t paid taxes last year and have no clue what and where to start from.

Also, I applied for Credit Card but was denied due to bad CIBIL score. When I tried to generate CIBIL score online, my payment got declined almost 6 times. Money wasn’t deducted. 

Now I really want things to get straight and right. 

I want to pay my taxes, I want to have my CIBIL score improved and get thing correct. 

What should be my first step and who should I approach? 

Please know, I’m not the best at understanding investors terms. 🙂


18 replies on this article “Haven’t Paid ITR & Clueless about CIBIL. Please assist!”

  1. Dear Abhishek, yes is the answer.



  2. Abhishek Dwivedi says:

    @ashal: Alright…I guess I get the idea. Although the rent was in Rs/INR not USD so I guess my tax would be.

    So its safe to conclude that the solution to my issues are:

    1) Connect with a CA and have him sort out the taxes ASAP.
    2) Get a credit card against an FD, build up a CIBIL and then later apply for a different card.

  3. Dear Abhishek, So for FY 2011-2012, Income is 38000 USD.
    Expenses = 12000 USD + Rent (14000*12/50) = 12000+8400 = 20400 USD
    So net profit from your business = 17600 USD = 17600*50 = 880000 Rs. roughly.

    As you do not have any tax saving for FY 2011-2012, full 8.8L Rs. are taxable. For FY 2011-2012, the zero tax income was 1.8L Rs. So from 1.8L to 5L Rs. you w’d have to pay tax @ 10.3% & from 5L to 8.8L Rs. you w’d have to pay tax @ 20.6%. Calculate this tax. apart from this normal tax, there ‘ll be interest on not paying your due taxes in time under section section 234 of Income Tax Act.



  4. Abhishek Dwivedi says:

    @Ashal: Gross expenses should be around $12,000 and can provide 14,000INR X 12 house rent slips. For those $12,000, I have digital invoices generated online from people I’ve hired for outsourcing…mostly other freelancer developers and designers and 2 outsourcing firms.

    For GY 2012-13, it should be close to $13,000 26,000INR in health insurance and 15,000 X 12 in house rent slips.

  5. Dear Abhishek, If I consider it rounded off to 38000 USD, your income for that FY 2011-2012 was around = 38000*50 = 1900000 Rs.
    This is your gross income. Now do tell me your gross expenses for that FY.

    Same thing for FY 2012-2013.



  6. Abhishek Dwivedi says:

    @Ashal: From that point till 31st March 2012, It’s close to $37,970 as per my records. For next slot, from April 2012 till Jan, it’s close to $24,320.

    For credit card, I guess I’ll want to get an idea of how much I’m looking at for tax and then decide a FD.

    @Sudarshan: I’ve always used Kotak and had all the money automatically widthdrawn from Paypal India to my account in Kotak. They bluntly refused to give me a card saying my score wasn’t too good. Yea, I can get a card from them for a FD. I think you’re right about getting a card to build the score before applying for a new one.

  7. Sudarshan MS says:

    @Abhishek Dwivedi… I am a freelancer too (SEO/SEM specialist) and I had the same problem when I started in 2007/2008 ( I pad 30% tax + interest as I didnot plan anything and didnot contribute to 80C).. If you have withdrawn money as cash you can still show that with receipts (still you would have to do a lot of withdrawal!!) Get hold of a good Charted Accountant he should be able to help you out.

    I am sure you have a good bank balance with the amount you made.. If you have a HDFC and ICICI account then you should not have any problem in getting a credit card… If you maintain a good balance in HDFC it would be a piece of cake to get a CC and for ICICI go for FD (if you are a wealth management customer then getting a CC is very easy!!).

    PS:- With this you can build your credit history but do pay your CC payment on time, Now I have got a housing loan with filing proper ITR( for past 4yrs). You can do that too 🙂

  8. Dear Abhishek, No problem, if it’s July or August 2011. Now my next question to you is, please check your own record & pin point the income earned by you from July 2011 till 31st march 2012.

    Next slot of income from 1 April 2012 to till date & possible income till 31st March?

    Regarding Credit Card, why next month & not now?



  9. Abhishek Dwivedi says:

    Hi Ashal,
    Thank you for the detailed reply.

    Yes, I’m planning to get a card against FD next month since that’s the only option I see. Curious, does everyone who starts out has to get a card the same way?

    About the date, I don’t really remember exactly but it should be close to July 2011.

  10. Dear Abhishek, From the rplies posted by you, I assume your CIBIL report is NH – No History. In simple words, there is no past records for your credit dealings. That’s obvious as you are just 22 & have not availed any credit facility. Now let me answer your query one by one.

    For credit card – Please open a bank Fd in your bank you are dealing with & ask there to get a secured credit card against that FD. you ‘ll get 90% FD value as your credit card limit.

    Please provide me date or at least month from when you started this freelancing so that I can comment on your tax liabilities.



  11. Abhishek Dwivedi says:

    @Gotu: Doesn’t sounds silly to me…it could be that.

  12. Gotu says:

    You have never taken a loan and never had a credit card….So you don’t have a repayment history…….So bank is not sure whether you will pay back you dues or not as you haven’t done this before……….Little strange and silly; but probably thats the truth of your low CIBIL score.
    I am not an expert so what I have posted can be wrong.

  13. Abhishek Dwivedi says:

    I need a card since it’s vital to what I do online and I want to expand.

    If you want to pay for something online…PPC, MediaBuys, AppStore memberships etc…you need a valid credit card to do so. Debit cards don’t work with every gateway.

    I’ll try and contact CIBIL and see what comes up. I’m no expert with these thing…I didn’t even know what CIBIL was until my bank declined my application and said my score was bad…lol it kind made me feel bad and so I really want things straight now.

    Looking forward to what others take is on this one. 🙂

  14. How much you owe depends on how carefully you are able to account for all your income sources. Roughly 30% (plus a little more interest) would be a conservative guess!

    I am curious to know why you want a credit card. I don’t own one and my CIBIL score would be “no history”. My take is, : “if the only logical thing to do with credit debt is to pay in full before the due date, them might as well pay/arrange cash (offline or online)”.

    Contact the helpline of CIBIl to find a way out. There are credit expert companies which may help for an extra fee. Sometime CIBIL personnel themselves answer in this forum!

  15. Abhishek Dwivedi says:

    So my first job would be to pay taxes for both the financial years. Any ideas how much I would be owing…just a rough idea?

    And yes, that’s whats troubling me too. I’m only 22, never took loan, never had a credit card, any and all the bills I get are paid in full on time so it shouldn’t really be bad.

    Then I can’t generate my CIBIL score online too…always getting that transaction failure error after the payment gateway.

    And if anyone has a recommendation of a CA, please do let me know.

    Thanks again.

  16. Abhishek Dwivedi says:

    Thanks for such a quick response.

    I was told by my bank that my “CIBIL credit score” was not as par with their standards and they require at least 700-800ish. So I figured mine is way too low…but I’ve never taken loans or anything like that. How can my score be low?

    My revenue for the last year was close to $35,000 I guess and I can find out invoices of the investment etc upto $10,000 – $12,000 including rent slips. How much tax would I owe?

    Do you recommend a CA is the New Delhi area who would be able to help?

    1. Yes you would need some proof for ALL income sources. For now just get hold of a CA with the help of your contacts and get rid of this tax burden. You will then feel much better.
      Beats me why your CIBIL is low If you have never taken loan or had a credit card before. Banks reject credit cards for all sorts of weird reasons though.

      Credit experts in this forum will shed light on this.

  17. It would be best if you approach a chartered accountant and get to file past returns, calculate total tax for all applicable years.

    If you didnt get a CIBIL report how you know your score is bad? Is that your expectations based on past behavior? If so address that first. A credit card can wait.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.