Do I Need a CA for Tax Filing?
Taxpayers filing their taxes for the first time are often daunted by the elaborate process of filing income tax returns. Which Income Tax Return (ITR) form should I choose? Which is the right assessment year? Am I eligible for any tax exemptions? How much do CAs charge for tax filing? Should I go to a CA for tax filing?
In this blog, we will look at some of the basics you need to know about the ITR filing process post which you will have a clear idea about whether to choose a CA for tax filing, especially for the first few times.
Process of Filing Income Tax Returns in India
Before filing your ITR you must register yourself on the e-filing portal. To login into the e-filing portal and file your ITR, follow these steps:
1. Visit the e-filing website and click on the ‘Login Here’ button.
2. Enter your username and password and click on ‘Continue’.
3. After logging in, click on ‘e-file’ and then click on ‘File Income Tax Return’.
4. Choose the Assessment year for which you wish to file your ITR and click on ‘Continue’.
5. Click on the ‘Online’ option when asked to select a mode of filing to proceed.
6. Click on the option ‘individual’ under the status applicable. This section inquires whether you wish to file your ITR as an individual, Hindu Undivided Family (HUF), or others.
7. Choose the ITR form you wish to file (ITR-1/ITR-2/ITR3/ITR-4).
8. Next, choose your reason for filing your tax returns. Depending on whether your taxable income is above the exemption limit or if your income meets any of the conditions listed in Seventh Provision to Section 139(1), or others, choose the right option.
9. Enter your bank account details. If you’ve already done so, pre-validate the details.
10. You will be directed to a new page where you are required to confirm the summary of your returns and validate the same.
11. Verify your returns and send a hard copy to the Income Tax Department. Please note that the verification process is mandatory.
Documents Needed to File
Documents required for ITR filing in India FY 2021-22 (AY 2022-23) include the following:
1. PAN Card.
2. Aadhar Card.
3. Form 16/ 16A, which is the certificate of deduction of tax at source and issued on deduction of tax by the employer on behalf of the employees.
4. Form 16B, issued by the buyer to the person selling his/her property. (If applicable)
5. Form 16C is a TDS certificate that reflects the TDS deducted on rent @5% by an individual or HUF under section 194IB. (If applicable)
6. Bank Account details.
7. Form 26AS, an annual tax statement that includes details of all the taxes you have deposited against your PAN.
8. Home Loan Statement with details such as principal and interest repaid by the individual.
9. Details of Tax-saving instruments like tax-saving FDs, ELSS, investment receipts, etc.
10. Capital Gains Details like broker statements, property sale deeds, etc.
11. Rental Income from your house or property.
12. Foreign Income.
13. Dividend Income from shares or mutual funds.
Benefits of Taking Help of a CA to File ITR
If you are a salaried individual with salary as your single source of income then tax filing is quite an easy task, as all you are required to do is feed the numbers mentioned in the Form-16 provided by your employer. However, in today’s time where people have their earnings from multiple sources, using the help of a CA for tax filing is an intelligent decision.
In addition, here are some of the circumstances, where you must use a CA for the tax filing process. These include:
1. If you are self-employed or own a business, you are required to maintain a book of accounts. This book requires mandatory auditing by a CA if the gross receipts from your profession are more than Rs. 50 lakh or if the business turnover is over Rs. 1 crore.
2. If your various sources of income, such as capital gains, rental property, etc. are tied up in tax complications or notices, it is best to use the help of a CA who is familiar with the regulatory procedures.
3. If you don’t have the time and you are struggling with tax computation, hiring a CA to help file your tax returns will save you both time and money. Please note that any delay in filing beyond the due date in turn can subject you to a hefty penalty of Rs 10,000 or more.
New Income Tax Slab and Pre-filled ITR
Those who chose the new tax regime will benefit from a pre-filled ITR. This will help the taxpayer to pay the taxes without the help of an expert. If you don’t want to pay money to a CA for filing taxes, the pre-filled ITR will make things much easier for you.
General information such as name, address, and date of birth are pre-filled in your ITR form based on the PAN number. Similarly, details such as residential status, ‘income from other sources’, etc., are also pre-filled. Hence, ensure the auto-populated information in the ITR is accurate and updated. Here are a few sections of information that you may find pre-filled in the ITR form –
- Salary schedule including details such as employer name, address, and TAN.
- House Property Schedule. However, details of rental income are only pre-filled in case TDS is deducted by the tenant. You are still required to provide the details of housing loan interest, etc. manually.
- Income from other sources, including interest and dividends is auto-populated based on information provided by the bank and other financial institutions.
- Deduction under Chapter VIA schedule.
In the wake of successive Covid-19 waves and the government’s priority on the health and infrastructure sector, the tax slabs have remained unchanged with very small changes in surcharge rates. Simply put, if your income source is limited to salary alone, filing your tax returns is easy.
However, if you are self-employed or have other sources of income such as rental income, capital gains, etc., then hiring a CA for tax filing is a smart choice. Similarly, if you are filing your taxes for the first time or have missed filing taxes in the past and are required to pay penalties or have tax implications, then also you should hire a CA.
Can we file ITR without CA?
Yes, you can file your ITR without the help of a CA by simply uploading Form 16 onto the Income Tax India website. However, if you are self-employed or own a business, you are required to maintain a book of accounts. This book requires mandatory auditing by a CA if the gross receipts from your profession are more than Rs. 50 lakh or if the business turnover is over Rs. 1 crore.
How can I file my Income Tax Return by myself?
You can file your tax returns on the Indian Income Tax website by following these following steps:
Log into the e-filing website
Click on the tab ‘e-file’ and then click on ‘File Income Tax Return’.
Choose the Assessment year and click on the ‘Online’ option for the mode of filing.
Choose the option ‘individual’, under the status applicable.
Select the ITR form you wish to file (ITR-1/ITR-2/ITR-ITR-4).
Choose your reason for filing your tax returns.
Enter your bank account details. If you’ve already done so, pre-validate the details.
You will then be directed to a new page where you are required to confirm the summary of your returns and validate the same.
Verify your returns and send a hard copy to the Income Tax Department. Please note that the verification process is mandatory.
How much does an audit cost in India?
As per the minimum fee recommended by the Committee for Capacity Building Members in Practice (CCBMP), the fee for a tax audit is above Rs 40,000, while the fee for a company audit may range from Rs 50,000 to Rs 80,000 and above. Furthermore, auditing costs may vary depending on the responsibilities given and the complexity and risk associated with the tasks given to the auditor.
How much does a CA charge for filing a return?
ITR filing charges will vary depending on the responsibilities given to the CA. The starting fee for filing tax returns using a CA can be Rs 1000 – Rs 2000. The rates can go higher in case you opt for additional special services such as company audits and resolving tax complications.
Can a CA save my tax?
If your income sources qualify for certain tax exemptions and deductions that you may not be aware of or if you aren’t well informed of the difference between the old vs new tax regime, then a CA can help you save on taxes by providing proper information and complete necessary filings before the due date.