The next time you sit down to fill your annual tax returns, you will have some help in the form of a tax return preparer (TRP). With tax professionals mostly chartered accountants in short supply, the finance ministry is gearing up to roll out the first batch of TRPs.
This new breed of quasi tax professionals will assist self employed people and businessmen with annual income of around Rs 3 lakh or less. The TRPs will target nearly 20 lakh taxpayers that get added every year to the tax net. Currently, India has 4 crore tax payers. Software training firm NIIT is likely to be selected to impart nine days of training in tax law and I-T returns to TRPs. NIIT will get technical assistance from tax law firm, Taxman.
In 2006-07, NIIT is likely to train 5,000 TRPs who would be graduates in law, economics, computer science, statistics, accounting or mathematics. These graduates will be admitted to the course after clearing an entrance exam. The TRPs will be given an identification number and a certificate on completing the nine-day course. It is important to have graduates from (educational) fields which are familiar with the laws of taxation and its computation, said a Central Board of Direct Taxes (CBDT) official.
In order to maintain high standards among TRPs and to prevent frauds such as suppression of income, the TRP scheme has some in-built preventive measures. First of all, the TRP scheme is aimed at serving taxpayers and is not envisaged as an employment generation scheme, said a CBDT official. This will help those involved in training TRPs to maintain a certain standard, he added. TRPs will be given a refresher course every three months to brief them of any amendments or notifications in the tax laws.
Software is also being devised which will measure the mistakes made by a TRP in the tax return. If the mistakes exceed a specific mark, the TRP will be given a warning to improve otherwise his certificate will be cancelled, said a income-tax official.
Even on the remuneration front, the CBDT has exercised caution to make the scheme more revenue-favouring. For instance, the TRPs will be paid 3% of tax collected from a new tax payer in the Rs 3 lakh and less income bracket. The 3% commission will become 2% and then 1.5% in second and third year as TRPs expand clients. We are contemplating putting a ceiling of Rs 1,000 on the commission per tax return, a CBDT official told ToI.
CBDT is also setting up a resource centre to monitor the TRP scheme. The centre will have a commissioner and an additional commissioner of income tax. The TRPs will be encouraged to tap new tax payers even though existing taxpayers especially salaried individuals will be free to take their assistance.