With the emergence of lockdown worldwide due to the covid pandemic and knowing its foreseeable presence in the coming few years, it has become challenging for every citizen to perform their daily activities and regularly work as old times.
This has forced people to start work from home jobs, run from home businesses, and eventually earn money online. With this new advent, it is also now necessary to have tax filing and consultations entirely online.
No doubt the tax filing process is entirely online, but tax laws and structures are so complex that almost every taxpayer refers to a tax consultant for his return filing. Then it may be a tax filing portal of a private company or a local tax consultant.
In this article, we discuss how online tax consultations are provided in India and the things one should consider while taking up an online tax consultation.
India itself has a very complex tax structure and tax law. It is so complex that it ranks in the second number after China for having a complex tax structure. The same has been proved in the Deloitte Asia Pacific Tax Complexity Survey 2017. Not only is it complex, but it has the most complex reporting requirements also.
Due to such complexities, very few people file their tax returns on their own using the basic and complex tax filing facility available on tax portals. Instead, they prefer some tax consultants filing tax returns for them. It may be an online tax software developed by tax consultants and tax experts, or may it be getting help from local tax consultants to file tax returns. Below are two types of tax consultants that people refer to:
With the emerging retail market in India and fastly increasing taxpayers, few online tax portals have emerged, which help people file their tax returns in a fast way & for a very minimal cost. However, the problem with these portals is that they have a Do It Yourself tax filing model.
Hence, the taxpayer must fill in all information and data and file his tax return, which is software generated. Even if he gets a paid consultation from a tax expert on the portal, it does not guarantee the return’s accuracy, as the tax expert’s qualifications and expertise are unknown. Also, being on the payroll, he does not take tax filing responsibility but only guides you through the process.
Also, as these tax experts are on the payroll of these tax filing portals, they keep changing year by year. Hence, when actual tax notice comes, they cannot help, nor have a physical presence where you can visit and question them personally.
Traditionally many tax consultants are present physically by having a local tax office and help many taxpayers in affinity to file tax returns year by year.
However, the problem with these tax consultants is that they are not up to date with changing tax laws, and very few of them have an organized online system where people can log in and submit data, consult them and check their ITRs, hence the whole tax filing is unorganized and haphazard.
Also, many times there are issues of timely communication and accountability with these types of consultants. Mainly one needs to physically visit them to get their tax returns filed by taking a prior appointment, and since covid, it has become a risky task.
Tax consultants having comprehensive tax laws and especially in direct and indirect tax laws, can help tax planning and tax management.
Tax consultants can help in strategic decision-making to save taxes and increase cash in hand and eventually increase the ROI of a business.
He can guide you to take legitimate steps to save on taxes and improve the strength of your financials. In the long term, this would be of great benefit as eventually having an excellent financial strength would fetch good funding for business and increased expansion and ROI.
Tax Consultants Can Guide You In:
Most people confuse themselves between accountants and tax consultants. However, both are people having different expertise in different fields.
Accountants have experience in bookkeeping and accountancy and are well versed with accounting principles and accounting standards used by different countries. They are mainly responsible for maintaining up-to-date accounts of an entity and keeping records of all bills related to the entries made. Accountants may or may not know tax laws and are hence not the best person to get help for tax filing.
On the other hand, tax Consultants are people knowing various direct tax laws and indirect tax laws. They are well versed with different changes and timely updates made in tax laws and are experts in tax filings and consultations. Also, they have professional qualifications for tax practice and are hence eligible to represent an assessee before a tax authority.
Concluding this part, it is more important that one should consult a tax consultant rather than an accountant for personal tax filings.
Tax filing software could be an excellent help for seasonal tax returns and can ease your tax filing work. However, this software is helpful for tax consultants or tax practitioners who file many returns during tax seasons.
Though tax filing software helps inaccurate tax return filing, they only do 20% of tax filing work. Inputting correct data and knowing accurate tax laws is a crucial and significant part of tax filing. One mistake can invite you to a tax notice and increase the risk of tax penalty and interest.
Hence tax filing software cannot replace tax consultants. Tax consultants are of great help as they take the whole responsibility of filing and advising you on tax planning and management at large.
As you have got a fair idea about tax consultants’ tax consultants and benefits, let’s now talk about the emerging trend of online tax consultation in India.
Online tax consultation is a well traditional and old concept in foreign countries. However, in India, it is still emerging and new to date. Taxpayers filing tax returns were minimal. That community also preferred a local tax consultant.
However, due to emerging tax data mining and income data cross-linking with tax portals, almost all individuals have taxable income to file tax returns.
Hence, all salaried and business entrepreneurs filing tax returns require a tax consultant now and then may it be for tax filing or tax management. Due to a shortage of time and knowledge, most of them prefer online tax consultations from tax experts.
Online tax consultation can be over online meeting apps like Zoom or google meet or on chat like Whatsapp or a simple call. This tax expert connects to you over call and answers all the queries and questions you have during tax filing or tax planning. This service is of great help as it is very minimal and makes the tax filer understand the real problem he faces and the solution to it. He is made aware of all his tax issues which he faces personally.
Many tax portals charge a fee for tax consultations, but some portals like Consultaxx provide free tax consultations.
User can expect the below things in an online free tax consultation:
Taxpayers now don’t need to understand all tax laws or handle their tax filing blindfolded with half-knowledge but can take advantage of these kinds of free services to get their tax filings done accurately.
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