Income Tax: Do you need an expert to file your ITR? Pros and cons explained
Those who opt for the DIY approach have their hands full - examining the documents i.e., Form-16 to 26AS, choosing the appropriate ITR form, selecting the right tax regime, evaluating total amount of deductions and computing the tax liability. But is it all feasible and advisable? Perhaps yes, if you have only one source of income and not too many nuances involved in your tax return.
Alternatively, you could engage an expert -- a chartered accountant, and thereby outsource your responsibility to the one who knows tax provisions like the back of their hand.
Experts recommend that taxpayers engage a chartered accountant when earning income from a myriad of sources. This helps ensure clarity and compliance and avoids mismatches between AIS and Form 26AS.
'A professional brings clarity, ensures compliance with the latest tax rules, and helps avoid mismatches with AIS or Form 26AS, which are becoming common triggers for scrutiny. Especially for anyone with multiple income sources, capital gains, or business income, expert guidance is essential,' says Kinjal Bhuta, Treasurer, Bombay Chartered Accountants Society (BCAS).
Some taxpayers resist the idea of engaging a chartered accountant to avoid paying the fee. But the avoidance of inconvenience when an expert takes over is worth paying that fee for. When you pay ₹ 5,000 as a fee to the CA, it may look like an unreasonable sum, since you believe you could do it all by yourself. But if some anomaly creeps in -- the penalty or fine would far outstrip this humble sum of ₹ 5,000. It is, therefore, recommended to let the expert do this job.
"Often the cost saving of not hiring a professional leads to huge tax litigation liability in future - straining the taxpayer's time, money and efforts. Many taxpayers unknowingly make mistakes—like misreporting income, selecting the wrong ITR form, or missing out on eligible deductions. These errors may seem minor, but can lead to notices, delayed refunds and even interest and penalties," Bhuta added.
Importantly, when you engage an expert, the chances of getting a tax notice would be minimal. After all, the Income Tax (I-T) Act is a piece of legislation which needs to be interpreted and inferred correctly, and CAs are trained in doing this.
'ITR filing is not just about filing information in a form. It's about interpreting law, optimising tax and presenting correct information to avoid future litigation. For that, you should always consider an expert. Taxpayers should not be penny-wise, pound-foolish as spending money on compliance today helps to save big in future,' says Pratibha Goyal, a Delhi-based practising chartered accountant.
Another argument experts make is that CAs tend to advise their clients about tax planning. 'CAs know all the provisions and therefore, can advise taxpayers about how they can save their tax, going forward. If someone uses online tools, then customised tax planning may not be as effective,' says Deepak Kumar Agarwal, a Delhi-based chartered accountant.
For all personal finance updates, visit here
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
35 minutes ago
- Time of India
Shocker for NRIs: Property sales now trigger steeper taxes
Ahmedabad: Non-Resident Indians (NRIs) selling real estate in India after July 23, 2024, are facing an unexpected tax shock while filing income tax returns. Due to changes in the long-term capital gains (LTCG) tax structure in the last budget, many are now staring at significantly higher tax outgo — a direct result of losing the benefit of indexation. Under the revised regime, NRIs are taxed at a flat 12.5% on LTCG without indexation — which means they cannot adjust the property's purchase price for inflation. Earlier, a 20% LTCG tax with indexation applied to all taxpayers, but the benefit has now been retained only for resident Indians. "Many NRIs are unaware of this change and are surprised when faced with high tax liability at the time of return," said Karim Lakhani, a chartered accountant based in Ahmedabad. "They can deduct only the original purchase price and cost of improvement of the property from the sale amount and must pay 12.5% tax on the entire gain, without any inflation adjustment. This sharply increases their effective tax liability. However, their TDS rate has been reduced to 12.5% from earlier 20%. Many face huge tax because there might be ancestral property as well," he said. You Can Also Check: Ahmedabad AQI | Weather in Ahmedabad | Bank Holidays in Ahmedabad | Public Holidays in Ahmedabad The confusion doesn't end there. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Utilise the same robust diesel/LPG forklift but in electric! Clark Equipment Learn More Undo Resident Indians with jointly held properties are also seeing inflated figures in their Annual Information Statement (AIS), the digital tax record that reflects financial transactions. Tax experts report that the AIS often attributes the entire sale amount to each co-owner. "If three brothers sold a property for Rs 1 crore, the AIS for each of them shows Rs 1 crore instead of Rs 33.33 lakh," said said Karim Lakhani, a chartered accountant based in Ahmedabad. Mukesh Patel, international tax expert said, "Similarly, in the case of joint bank accounts between spouses, the same income or transaction is reflected in both AIS records, effectively doubling the reported amount." He said, "Taxpayers must check their AIS carefully and raise feedback wherever the entries are inaccurate." The changes to LTCG tax rules were introduced as part of the central government's effort to simplify the capital gains regime. While resident individuals now have the option to choose between the older structure (20% with indexation) and the new flat 12.5% tax without indexation, NRIs have no such choice. As income tax filings peak, both residents and NRIs are being advised to consult tax professionals and carefully verify their AIS entries, particularly for property sales and large joint transactions, to prevent surprises or disputes with the tax department. Stay updated with the latest local news from your city on Times of India (TOI). Check upcoming bank holidays , public holidays , and current gold rates and s ilver prices in your area.
&w=3840&q=100)
First Post
2 hours ago
- First Post
Cambodian PM nominates Trump for Nobel Peace Prize for 'averting' war with Thailand
Cambodia's PM Hun Manet nominated US President Trump for the Nobel Peace Prize for helping halt a border conflict between Cambodia and Thailand, leading to a ceasefire. read more Cambodian Prime Minister Hun Manet has nominated US President Donald Trump for the Nobel Peace Prize, citing his role in defusing tensions between Cambodia and Thailand. In a Facebook post published late Thursday, Hun Manet shared that he had formally submitted a letter to the Norwegian Nobel Committee, commending Trump's 'extraordinary statesmanship' for helping to halt the border dispute. The letter described Trump's involvement as among his 'exceptional achievements in de-escalating tensions in some of the world's most volatile regions.' STORY CONTINUES BELOW THIS AD 'This timely intervention, which averted a potentially devastating conflict, was vital in preventing a great loss of lives and paved the way towards the restoration of peace,' the Cambodian leader wrote in the letter. It was a July 26 call by Trump to the leaders of both Thailand and Cambodia that broke the deadlock in efforts to end some of the heaviest fighting between the neighbours in recent history, Reuters has reported. That led to a ceasefire negotiated in Malaysia on July 28. The two countries agreed on Thursday to ensure no reigniting of hostilities and to allow observers from Southeast Asia. In total, 43 people were killed and more than 300,000 displaced by a five-day conflict that started with small arms fire and quickly escalated into heavy artillery and rocket fire, then Thailand's deployment hours later of an F-16 fighter jet for air strikes. The nomination had been expected after Cambodia's deputy prime minister last week announced the plan, while thanking Trump for a tariff of 19% on Cambodian imports by the United States – sharply reduced from the previously threatened 49% that he said would have decimated its vital garment manufacturing sector. Pakistan said in June that it would recommend Trump for the Nobel Peace Prize for his work in helping to resolve a conflict with India, and Israeli Prime Minister Benjamin Netanyahu said last month he had nominated Trump for the award. With inputs from agencies
Mint
6 hours ago
- Mint
Income Tax: Do you need an expert to file your ITR? Pros and cons explained
Income Tax: Fewer than 40 days remain before the September 15 deadline to file the income tax return (ITR) for FY25. Some taxpayers could be busy arranging necessary documents as advised by their chartered accountant, whereas others would be doing it all on their own. Those who opt for the DIY approach have their hands full - examining the documents i.e., Form-16 to 26AS, choosing the appropriate ITR form, selecting the right tax regime, evaluating total amount of deductions and computing the tax liability. But is it all feasible and advisable? Perhaps yes, if you have only one source of income and not too many nuances involved in your tax return. Alternatively, you could engage an expert -- a chartered accountant, and thereby outsource your responsibility to the one who knows tax provisions like the back of their hand. Experts recommend that taxpayers engage a chartered accountant when earning income from a myriad of sources. This helps ensure clarity and compliance and avoids mismatches between AIS and Form 26AS. 'A professional brings clarity, ensures compliance with the latest tax rules, and helps avoid mismatches with AIS or Form 26AS, which are becoming common triggers for scrutiny. Especially for anyone with multiple income sources, capital gains, or business income, expert guidance is essential,' says Kinjal Bhuta, Treasurer, Bombay Chartered Accountants Society (BCAS). Some taxpayers resist the idea of engaging a chartered accountant to avoid paying the fee. But the avoidance of inconvenience when an expert takes over is worth paying that fee for. When you pay ₹ 5,000 as a fee to the CA, it may look like an unreasonable sum, since you believe you could do it all by yourself. But if some anomaly creeps in -- the penalty or fine would far outstrip this humble sum of ₹ 5,000. It is, therefore, recommended to let the expert do this job. "Often the cost saving of not hiring a professional leads to huge tax litigation liability in future - straining the taxpayer's time, money and efforts. Many taxpayers unknowingly make mistakes—like misreporting income, selecting the wrong ITR form, or missing out on eligible deductions. These errors may seem minor, but can lead to notices, delayed refunds and even interest and penalties," Bhuta added. Importantly, when you engage an expert, the chances of getting a tax notice would be minimal. After all, the Income Tax (I-T) Act is a piece of legislation which needs to be interpreted and inferred correctly, and CAs are trained in doing this. 'ITR filing is not just about filing information in a form. It's about interpreting law, optimising tax and presenting correct information to avoid future litigation. For that, you should always consider an expert. Taxpayers should not be penny-wise, pound-foolish as spending money on compliance today helps to save big in future,' says Pratibha Goyal, a Delhi-based practising chartered accountant. Another argument experts make is that CAs tend to advise their clients about tax planning. 'CAs know all the provisions and therefore, can advise taxpayers about how they can save their tax, going forward. If someone uses online tools, then customised tax planning may not be as effective,' says Deepak Kumar Agarwal, a Delhi-based chartered accountant. For all personal finance updates, visit here
