CA Varun Jajoo
Most of us face this dilemma at some point of time in life – Should I spend 4 hours repairing a certain item (be it an air conditioner, some furniture or something else) or spend some money to hire an expert to do it efficiently. It was into the sixth hour of trying to repair my virus-infected laptop when the miser in me gave up and my mind cried out “Is 6 hours of your day really worth Rs. 2,000 which you are trying to save by not calling for the services of a Software Engineer?”
This got me thinking… If we would never jump off a diving board without swimming lessons, so why deep dive into business taxes without some guidance.
Every time you earn some money, a certain portion of it has to be paid to the government in the form of taxes. Preparing a tax-return is a cumbersome process and involves a lot of number crunching. Moreover, in a country like ours, where the number of taxes applicable is probably equal to, if not more than the number of languages we speak, it is not easy to compute the tax liability. Oh, and did I mention that the government can also penalize you for your inadvertent mistakes in tax calculations.
It is but natural that many people are apprehensive about giving out their financial data to a complete stranger. However, making an expensive mistake or overlooking an important deduction is a much higher risk.
For most people, ‘tax savings’ brings to mind Life Insurance Policies, PPF, NSC, Mutual Funds and Equity-Linked Savings Scheme etc., that qualify for tax deduction under Section 80C of the Income-tax Act, 1961. However, there are many other lesser known avenues that offer additional tax breaks to tax-payers. They are not widely discussed as they involve special situations in life such as having a special dependant, paying rent to parents, owning a house in another city, and so on.
Did you know..???
Some of the below mentioned scenarios highlight the convenience of hiring a tax consultant:
1. Starting and running a business –
There are many tax incentives / deductions available for various businesses. These tax savings can pay for themselves if your business is eligible for a tax break.
Also, if you are running a business successfully, wouldn’t you rather spend your time running the business and let the experts take care of your tax issues? Those hours / days spent working out your income and tax liability may be better spent earning much more than what you will be paying the tax consultant.
2. You can’t get a grip on your receipts and payments –
If doing the books and tracking the numbers just isn’t your forte, please hire someone to do it for you. It’s really not worth breaking your head over it, or going wrong somewhere and getting into trouble with the tax department.
3. Technology savvy –
Most of the tax returns are filed online nowadays. Every tax return software has a different system requirement (eg. Java version, macros etc.). It can be quite irksome and time-consuming when the tax software keeps throwing up errors which are difficult for a layman to comprehend.
Apart from the above, there are many inherent benefits of hiring a tax consultant:
To summarise, tax return filing is not an easy task. It involves a number of procedures. You are required to provide details about your income, investments, property etc. Tax laws and regulations in India are complex and filled with jargons. Navigating through this maze can be complicated. Are you confident of handling these well? A wrong filing could land you in a soup. Hiring a tax consultant might be a wise investment which will give you guaranteed returns in the form of tax savings as well as mental peace.
The author is a practicing Chartered Accountant who can be contacted at +91 98338 44156 or firstname.lastname@example.org. Assisted by Nikita Zambre (CA Intern).