Home Visits & Online Tax Help: IT Dept.’s initiatives under Tax Return Preparers scheme

The Indian Income Tax Department has been coming up with initiatives to ensure that Tax filing can be done with minimum of efforts. The have now come out with 2 new initiatives –Online Tax Help and Register for Home Visit.

Both these initiatives have been launched under the Tax Return Preparer (TRP) scheme in which tax payers can take the help of registered professionals to file their returns. The scheme is currently available in Mumbai, New Delhi, Chennai, Kolkata, Bangalore, Guwahati, Hyderabad, Jaipur, Patna and Lucknow. The IT department said that more cities will be added.

To use the TRP scheme, tax payers will have to log on to www.trpscheme.com and can either click on Register for Home Visit or Online Tax Help.

From the website, tax payers can either fill out details on online forms or look for registered TRPs in their states and districts. If tax payers choose the online route, their query will be answered either via email or phone by tax experts.

If the home visit route is chosen, a TRP will schedule a home visit and assist the tax payer.

Who are TRPs?

Tax Return Preparers or TRPs are registered professionals, who with the support of the government can assist individuals / HUF to file their tax returns. For their services, TRPs can charge up to Rs. 250 for preparation of every return.

Additionally TRPs will receive an incentive from the IT Dept. which will be a percentage of the tax paid, up to a maximum of Rs. 1,000. These incentives range from 3% of tax paid by every new assessee followed by 2% and 1% in the second and third year respectively.

For old and existing assessees, TRPs will receive a flat fee of Rs. 250 from the IT Dept.

What will the TRP do?

Prima facie, it seems that TRPs will be responsible in assisting tax payers to prepare their IT returns. They will also furnish the returns with the IT Dept and subsequently maintain a record of the filing. It is important that TRPs are not be confused with accountants or auditors.

In formal capacity, their role merely seems to be that of a person who can assist and help to file and organize an IT return.

Who benefits by these initiatives?

The lay man tax payer can avail professional help to fill out tax returns without paying more than Rs. 250. The TRPs on the other hand can charge tax payers, and earn incentives from the IT Dept. On the TRP scheme’s website, success stories of TRPs claim that registered professionals are now taking advantage of this initiative and are assisting thousands of tax payers every year. With figures like these, being a TRP could very well be a mainstream income source.

Of course, there is benefit for the IT Dept as well. This initiative may go a long way into increasing collections for government coffers as TRPs will assist tax payers in filing the right amount of returns. Additionally these initiatives also have the potential of drawing in first time tax payers with the apparent notion of ‘ease of filing Tax returns’.