Any time you receive any monetary benefit in India, a portion of it has to be paid in tax form to the government. Preparing a tax-return document is a cumbersome process that requires a lot of number crunching. Moreover, it is tough to accurately calculate the tax liability in our country where complex laws are addressing the taxes and an incorrect tax filing can provide the authority to the government to penalize you for your careless tax calculation mistakes.
Why is tax-saving a complicated process?
Note that many people are apprehensive about transmitting their financial data to an outsider but making a costly error or missing a significant deduction can be a considerable loss.
Suppose you’re living with your parents, you need to pay the rent to them. If parents have no substantial compensation, their compensation does not reach the taxable thresholds. On the other hand, you’ll end up saving rent tax paid; a win-win situation for both of you. Likewise, there are tax benefits for raising a family as well.
The term ‘Tax savings’ brings to mind for most people life insurance plans, PPF, NSC, Mutual Funds, Equity-Linked Savings Scheme, etc., which qualify for tax deduction under Section 80C of the 1961 Income-Tax Act. However, many other lesser-known deduction opportunities offer tax-payers additional tax breaks. Such uncommonly discussed opportunities include having a special child, paying parents rent, buying a house in another area, etc.
Below are some of the instances that reiterate the ease and importance of hiring an income tax consultant:
1. Inaugurating and running a company-
Many tax benefits/deductions are available for different companies. If your company is deemed eligible for a tax exemption, those tax benefits will be paid for by them. You can avoid wasting your time worrying about taxes; rather focus on running your company. Chartered accountants are useful in such situations saving you from tough circumstances.
2. Taking care of your receipts and payments-
As an entrepreneur, you don’t need to lose your peace over the payments and receipts. A chartered accountant can take care of your receipts and payments.
3. Dynamic technology-
Nowadays, most tax returns are filed electronically. If the tax software keeps throwing up errors that are difficult for a non-specialist to comprehend, the procedure can be quite tedious and time consuming for a taxpayer.
Apart from what is mentioned above, the appointment of an income tax consultant provides other inherent benefits:
- Staying updated on ever-changing tax legislation
- Getting professional advice and experience
- Being a tax spokesperson
- Finding tax deductions unknown to you
- Offering all year round tax guidance and recommendations
To summarise, filing tax returns is not easy and requires a lot of procedures. In India, tax laws and regulations are complex. Hence it could be a wise investment to hire an income tax consultant that will give you ROI in the form of tax savings as well as mental peace.