Who is a Tax Consultant in India? What to mind?

Understand who is a tax consultant, what qualifications they should have, the benefits of working with one, and what to look out for when working with one.

This document covers

1. Who is a Tax Consultant?
2. What help can one expect from a tax consultant?
3. What should you keep in mind when working with an expert?

1. Who is a Tax Consultant?

A tax consultant is a tax professional who helps clients with filing taxes, optimising their taxes, and planning their taxes. This document explains what a tax consultant is and what you should remember when dealing with one.

According to the department of finance, there is no specific definition of who can be a tax consultant, but it can be safely interpreted using Section 288 of the Income Tax Act of 1961 and Rule 51 of the Income Tax Rules, 1962, which state that "the person who has acquired a degree in commerce or law from recognised universities" (in India) can act as a tax consultant and/or an authorised representative for a taxpayer.

A tax return preparer (TRP) who can act as a tax consultant to prepare IT returns and support notice handling, for example, must have a bachelor's degree from a recognised university in India with a specialisation in the following.

1. Commerce (B.Com.)
2. Mathematics (B.A./B.Sc.)
3. Economics (B.A./B.Sc.)
4. Statistics (B.A./B.Sc.)
5. Management/Business Administration (BBA/BBM)
6. Law (LLB)

Based on the above, a person with a degree in any of the aforementioned specialisations could work as a tax consultant, and no certification is needed from CBDT or a Commissioner of Income Tax. While a degree is just part of it, it is important to have wide work exposure to understand various laws so that you can get the right advice.

Not every professional, who possess a certificate or who passes an exam will meet your requirements, so it is critical to select the right brand of portal to keep an eye on them.

2. What help can one expect from a tax consultant?

A taxpayer can use a tax consultant for any assistance related to taxes in India. Below are some of the key activities he may perform to help you.

1. Computation of Income Tax and GST
2. Filing of income tax and GST returns
3. Consultation, financial planning for you as an individual or for your business
4. Consultation, planning, and registration of entities such as firms, LLPs, companies, etc.
5. IT or GST Notice Handling
6. assistance in form submission related to ROC, though this could be done by a company secretary.
7. accounting assistance, including balance sheet and profit and loss statements. and/or assisting a chartered accountant (CA) (in case a tax audit is needed).

3. What should you keep in mind when working with an expert or tax consultant?

Even if you hire a tax service with expert help, it is still your job to make sure that your taxes are correct and that you report all of your income correctly.

These are some important considerations and measures to take.

1. Consultants frequently change your email address and mobile number on your ITD Portal account to their convenience. However, in this case, all correspondence from Income Tax, GST, TDS, and any other agency will be sent to your tax consultant's email address and mobile number, and you will have no idea what is happening with your account.
2. There is a possibility that the tax expert will supply additional bank account details for refund claims.
3. Because you can't get into your accounts, you can't get important documents like an ITR or a GST registration certificate when you need them.
4. Because the OTP is sent to your consultant's email address and mobile number, changing your password or switching to a new tax consultant is quite tough.
5. It's possible to misuse a PAN by giving it out for things like loans and other things that the taxpayer doesn't know about. This may affect the taxpayer's CIBIL score.
6. TDS data may be altered without the taxpayer's notice because he does not receive email or smartphone notifications.
7. Credit for TDS or GST might be granted to others without correct invoices, which may result in scrutiny and demand from tax authorities.

It's best to use the taxpayer's own phone number and email address for tax-related matters, since taxes are very private and unauthorised access to them could lead to a huge loss of money and information.