Guiding note for freshers with no commerce background intending to start Income tax practice

A guiding note for freshers who intends to start Income tax practice with no commerce background

I had been a science student with no commerce back ground. But I am in Income tax practice for the last 32 years. A brief background is as under.

I completed my BSc. with mathematics from Nehru College, Faridabad, joined LLB at Meerut and completed in the year 1992. I was good at mathematics, Physics, Chemistry, Hindi & English though I was not having basic qualification from Accounts background but I joined tax profession due to family profession. My two brothers are Advocates and one brother is CA. When I joined the family profession I was quite new to the profession. Not having commerce back ground. First I learned to fill up the challan for deposit of taxes. Then I learned to fill up the forms of Income Tax Return as those days returns were filed manually. But I had to think much on entries in the books of accounts. Started to write account books manually those days and could understood the basics of cash book and ledger. As my English was good from the very beginning I studied CTR & ITR Judgments. I remained confident and I am always benefited by reading judgments. I started to prepare small returns and slowly started to appear in scrutiny cases u/s 143(3) and then in appeals. I want to state here that a person who is a law student and even who is having no background of commerce stream can excel with pure dedication towards profession. Passion towards work, will power, dedication and study is required to survive in the profession. Now a days huge competition is there as young CAs has captured the entire market. They are smart, intelligent, hard workers and well versed with the subject. Despite huge competition a person can survive in the market by doing hard work and there is no other way. In profession you have to study constantly and have to work daily.

Some Do’s are as under:

1. Buy latest Income Tax Act, 1961 & Income Tax Act Rules, 1962 and ready reckoner and keep all on your table so that client acknowledges that you are in practice of Income Tax.

2. Study daily one or two pages of Income Tax Sections so that interest is created in Income Tax matters.

3. Some Sections initially you have to understand and some important definitions.

i. Assessee (Section 2(7) of the Income tax Act, 1961)

ii. Assessing Officer (Section 2(7A) of the Income tax Act, 1961)

iii. Assessment Year and Previous Year.

iv. Heads of income (Section 14 of the Income Tax Act,1961)

v. Gross total income

vi. Total income i.e. taxable income

vii. Definitions of persons(section 2 (31) of the Act, 1961)

viii. Rate of Income Tax person wise and slabs

ix. Education Cess

x. Surcharge

xi. All ITR forms number wise and which person has to use which form for filing ITR.

xii. Now read the complete ITR forms

xiii. Section 44AA who has to maintain the Books of Accounts.

xiv. Section 139(1), Section for filing Income Tax Return.

xv. 139(4) belated return.

xvi. 139(5) for revised return.

xvii. 142(1) when a notice from department is issued.

xviii. 143(2) notice for scrutiny cases.

xix. 143(1) Computation of the correct taxable income to be made by the department.

xx. 80C deductions to be claimed like LIC, NSC, PPF, Mutual Funds, etc

xxi. 80D, 80G, 80GG, 80GGC, 80GGB, 80DDB

4. Trust in God always.

Study section 2 for definitions. Study section 10 for exempted incomes. Study section 11 & 12 for Income from property held for charitable and religious purposes. Study section 12 for Income of trust or institutions from contributions. Study section 22 to 27 for Income from House Property. Study rate of depreciation item wise. Learn how to prepare depreciation chart. Study how to prepare Trading A/c & P&L A/c. Study to prepare Balance Sheet. Even currently everything is available on youtube channels. But person is required to study of Income Tax. Study Section 30 to 43 for booking allowable expenses. What is revenue expenditure and what is capital expenditure. Study section 45 for capital gain taxes. Study section 54 for various types of deductions to save Capital Gains Tax.

Study section 192 to section 195 for various TDS provisions. Learn rate of TDS when to deduct and what percentage is required to be deducted. File the returns in time so that late fee u/s 234E is not imposed. Start to study judgments even available on net. Keep on going and one day you shall be able to save your clients properly.Without study you cannot do the work of Income Tax of your clients.

Initially one year you have to study various sections of Income Tax diligently even in writing. Start preparing Balance Sheets of the small clients coming to you. Discuss every topic with your friends in the same Profession, with your seniors. Never hesitate to ask anything from your seniors. Seniors may have less time but they shall not deny if you ask anything from them. Respect your seniors.

Become member of the Bar Association in your city. Attend monthly meetings. Enjoy the lunch and tea party there. Never sit alone; sit in the company of others. If you are married discuss the problems with your wife. She may tell a solution. If unmarried discuss problems with your parents. They may guide you well.Enjoy the profession fully. Keep in mind that you have to provide best services to the people year to year. In that way you can learn the art of practice in Income Tax matters. Even from non-commerce background you can go ahead in Profession. A Chartered Accountant is already well versed with the subject. But if you are a non-commerce background you can stand in the row but have to study a lot, should have passion to learn daily. Then you can survive in the profession. Income Tax is a vast subject and technical too. If you are not a hard worker, passionate, and you do not study on daily basis, you have to choose other field. No short cut or alternative is there. You will move on the road but you will have to take U turn better study hard, so that you learn the art of lifting hurdles which comes your way and keep moving ahead. Wear the best clothes and take care of your health always.

Some don’ts as under:

i. Never forge a document.

ii. Never claim any deduction without evidence.

iii. Never guide your client to save the tax by making manipulation.

iv. Never claim bogus expenditure.

v. Never misbehave with the revenue Officers.

With best wishes to my dear freshers who has joined the profession recently. God keep on blessing you.