Taxation is simple yet the most difficult things to deal with, there are just so many inclusions and exclusions that are bound to confuse anyone. But, the government from time to time tries to simplify the process.
Let’s decode the taxation process step by filing, and tips to find the right consultant.
Where to look for a tax consultant?
Tax consultants are jacks-of-all-trades. Asking for referrals can be a good bet when it comes to finding someone who’s the right fit for what you need. Ask business owners, financial advisors, and attorneys.
Don’t hesitate to call the firm or the tax consultants directly to explore whether they have the expertise to handle your taxes if there’s anything unusual about your situation.
What do they do?
A tax consultant, is someone who is capable of providing information regarding legitimate ways in which taxes can be reduced. A tax consultant also advises his/her clients about financial instruments where the client would get the opportunity to invest in those particular instruments and would get a relief from the taxes as deductions.
What are the benefits of the right tax consultant?
Understand the exemption limits: Tax consults will check individual’s taxation limits to see which one fits you the most. For instance, the taxable limit for an individual up to the age of 60 is ₹5,00,000 likewise, there are various income tax slabs that keep on changing year-on-year.
Should you file tax returns: Filing returns is always a good practice because it is a self-assessment wherein you certify that what amount is, legally, the government’s income.
If you don’t file an assessment, the government would not know whether it is their rightful income, or they need to return the money in the form of tax returns, which impacts the government’s future budget.
Even if you overpaid, you would leave the government in a vague situation wherein it wouldn’t know what amount is exactly payable to them, and just like everyone else, the government too doesn’t like uncertainty.
If your income exceeds the exemption limit, then you must file for tax returns, failing to do so will incur a penalty, and if your income exceeds ₹5 Lakhs, then you should be mandatory to file the tax return electronically.
Any tax consultant should be able to help you with it.
Penalty: If you do not file tax returns by the last date of filing tax refunds, then you can attract a penalty of ₹5,000. Thus, be always ready and try to file the tax return before the deadline.
Refund: If you have invested the money as per sections like 80c, 80g or has special exemptions like 80dd, then you can claim the refund for the exempted income taxed. A good tax consultant will help you figure this all out.
Giving an account of all the income: Remember that the government has an eye on all of your transactions, so report everything that you know, including interest and any other income that you have. It will help quick and hassle-free assessment of taxes.
Save money with good consultation: In a due course of time, you would figure out that it is the best way to go about doing things because a good tax consultant can help you save a lot of money that you otherwise pay in taxes.
NRIs are taxed differently: If you are an NRI (Non-Resident Indian), be sure to check additional inclusions and exclusions about paying income taxes. Also, under the benefit and difference of NRE (Non-Resident External) and NRO (Non-Resident Ordinary) accounts, and taxation, it is important, to take sound guidance before filing income tax. Hence, you must pay special attention to every aspect of taxation.
Beware of the red flags!
Be wary of a tax consultant who promises you a huge refund right from the start, before they have even analyzed your personal financial situation. It is always better to be clear and direct from the beginning.