She could be the most important person in your life. So choose your chartered accountant with care, says Vijay Bhambwani.
You’re a career woman, your career graph is soaring and your income is growing proportionately. Naturally, you are a tax payer and file your income tax returns on time. So far, it has been a walk in the park - dad has been handling your income tax matters and you were simply expected to sign on the dotted line.
But, if you want to strike out on your own, you need to find someone reliable to help you navigate the mine-field of taxes and tax returns, and that’s where finding a good chartered accountant (CA) becomes important.
Going Solo Your CA will have to handle all your IT matters and also take care of all the back-office functions and logistics relating to them. Each assessee is unique - with varying revenue patterns, and different requirements. Your best friend’s chartered accountant - though totally competent - may not be suitable for you!
Chartered accountants are like stockbroking/legal services firms - profiles and charges vary depending on the gamut of services offered by them and availed of by you. Here are a few thumb rules you can use to select your CA.
The Wish List: * Unless you are in a large-sized business of your own, with large income and expense heads, you do not need a large accountancy firm to handle your IT matters. The bigger the firm, the higher their fees and the less personal attention you will receive as a small client. Choose a CA commensurate with your requirements.
* If you decide to opt for a firm, go for one which is well-established and has younger talent. How fast your returns will breeze through the authorities’ scrutiny, often depends on your accountant’s familiarity with both the laws and the asses-sing officers. Firms often specialise in wards/ circles in which they routinely operate.
This gives you an edge, as the ‘comfort level’ between your CA and the IT officials is higher, as after all, your CA is your emissary to the tax authorities.
What Have You Done For Me Lately? * Clarify all aspects of rights and obligations before hand. Ideally, you need a firm which collates all the data from you, assimilates it in the format prescribed by the IT authorities, prepares your tax returns, files the same, pays taxes on your behalf and maintains all records at their end. However, you should keep photocopies of all documents for your personal records.
* Negotiate the fees for various services in advance. Accountants normally charge separate fees for filing returns, scrutiny of books of accounts and personal summons from the client. Clarify what all the applicable fees are in advance, in order to avoid problems later.
* Your CA has multiple roles to play. He/she should not only collect income and expense accounts from you and file them as they are, but should also suggest tax-saving schemes and shelters which have been approved by the tax authorities.
After all, if there are legal methods for reducing tax liabilities, your CA should suggest them to you and ensure that you part with as little of your money as is legally possible. Only then are his/her fees worth paying.
Refunds And Records * The process doesn’t really end there. Even after your returns are filed and taxes paid wherever due, there maybe cases where TDS (tax deducted at source) is higher than you should have actually paid.
Your CA must pursue the ward officer to issue a refund order (a cheque for the excess taxes paid). This is the most valuable task he/she can perform on your behalf, as the refund process is slow and a strenuous exercise. A good CA who saves you these countless treks through Aaykar Bhavan will be well worth his/her fees.
* The importance of back-office functions and logistics cannot be emphasised enough. Most assessees fail to realise that their liabilities do not end with the filing of their returns. According to the IT laws, the survey department can send an officer to the registered address of the tax payer at routine intervals to verify whether the tax requirements have been complied with or not.
Further, even some years down the line, the assessing officer is at liberty to re-open your books of accounts. Thus, your CA must maintain all records on your behalf, pertaining to proof of income and expenses, along with ‘challans’ of taxes paid and returns filed as supporting evidence.
* In the fast-changing scenario of automation, it would help if your CA has separate premises for storage of documents in the physical form, and also maintains a separate soft copy (electronic backup on tape drives or CD-ROMS) for easy access.
It is well within your right to enquire about his storage facilities - whether they are fire-proof, for example, to safeguard yourself from natural calamities.
Once you have considered all the above and appointed a CA, you can breathe easy. Concentrate on your core competencies and delegate the task of taxation matters to your chartered accountant.
Apart from filing your tax returns, your CA should also be able to advise you on tax shelters. She should also keep all records of your tax history, as your tax file could always be re- opened and questioned. Getting your tax refunds will be another important function
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