Tax Return Preparer: Understanding the Scheme
The Income Tax Department's Tax Return Preparer Scheme (TRPS) is to assist small and marginal taxpayers in preparing and filing their income tax returns. By the plan, more than 5,000 applicants receive training to prepare tax returns. In all, 120 centres have been set up throughout India to produce a sizable pool of competent individuals to assist assessees with filing their income tax returns. We explain what the Tax Return Preparer Scheme is in this article. Pensioners and salaried individuals are the group that most benefits from TRP services. By the plan, the article also describes how to become a qualified tax return preparer.
Table of Content
Who is a Tax Return Preparer (TRP)?
A Tax Return Preparer is a person who has been trained and approved by the Income Tax Department to assist taxpayers in filing their income tax returns (TRP). Although they don't have to be tax attorneys or chartered accountants, TRPs are qualified to assist people with filing their taxes for a small fee. Nevertheless, TRPs have a significant drawback: they cannot help with return filing under current regulations when a tax audit is necessary or mandated.
Duties of a Tax Return Preparer
A quick overview of the responsibilities that a tax return preparer must fulfil is as follows:
Preparing a taxpayer's income tax return.
Sending the completed tax return, as confirmed by the resource centre, to the appropriate Assessing Officer or relevant agency.
Obtaining a copy of the acknowledgement the taxpayer received from the IT department. This document provides evidence that the tax return was submitted.
Send a statement of particulars to the Resource Centre by the seventh of every month at the latest.
Keeping track of pertinent details relating to every tax return people have prepared, both in previous and present assessment years.
Eligibility to Become a Tax Return Preparer
Anyone with a bachelor's degree between the ages of 21 and 35 may apply to be a TRP. A recognised university in the following fields must grant such a degree.
How to Become a Tax Return Preparer
The income tax department regularly announces the program (roughly every two years). After the plan is made public, NIIT centres or the TRPS official website will accept online applications. The application forms will also be available in newspapers, and candidates can fill them out by following these guidelines.
The application form and a demand draft for Rs. 100 payable to "NIIT Limited-TRPSCHEME" A/c are enclosed.
Five thousand candidates trained at 120 locations nationwide.
Each centre will have its own recruitment process for choosing candidates for TRP training.
Out of the applications received, a maximum of 500 candidates per centre will be shortlisted based on their bachelor's degree grades.
An enrolment test is required of the shortlisted applicants.
A candidate may apply to three centers, making sure to specify their preferences on the application form.
Candidates who are shortlisted for the enrollment test at more than one training center will be assigned to the training center of their choice.
The website will display the enrollment test result.
Selected applicants will pay NIIT a Rs. 1000 security deposit. The candidate must complete their training before this deposit is refunded.
Successful candidates will receive the study materials, which include a classroom and web-based training program.
The candidates will pass an exam and receive their "Tax Return Preparers" certification. Additionally, they will receive follow-up assistance filing taxpayer returns via a web-based Knowledge Portal and help desk.
Only the shortlisted candidates are eligible for free training under the scheme. Candidates are responsible for paying their own lodging and transportation costs.
Steps to Locate TRPs
There are two methods for locating the TRP in your area.
Using the income tax website
Using the TRPS website
Use the following procedures to find a TRP on the income tax website:
Step 1: Click the "Taxpayer Services" button on the official website.
Step 2: Select the "link to relevant website" option under the "locate tax return preparer" tab.
Step 3: After entering your address or PIN, click the search button. A list of tax return preparers in your area will appear after you click "Register for return preparation."
Step 4: After selecting a TRP, click "Register for return preparation" and fill out the necessary information. You can also call them.
Step 5: Complete all the fields and press the "submit" button. You can click the "Click Here" button to explore the fees.
Additionally, you can sign up for a home visit by following the steps listed below.
Step 1: Click "Register for home visit" on the official TRPS website.
Step 2: Complete the required information, click the declaration, and submit it to continue the process.
Charges of TRP for ITR filing
When preparing income tax returns for a taxpayer, Tax Return Preparers (TRPs) charge a fee or receive a commission. The income tax assessee is responsible for paying the TRP charges as a flat fee of Rs. 250 to file an income tax return annually. The Resource Centre or the Partner organisation is responsible for paying the commissions that the TRP earns. The following table lists the requirements and the relevant commission that the tax return preparer may receive:
Condition | TRP Commission |
Year 1 | 3% of the tax paid by the assessee (up to a maximum of Rs.1000) |
Year 2 | 2% of the tax paid by the assessee (up to a maximum of Rs.1000) |
Year 3 | 1% of the tax paid by the assessee (up to a maximum of Rs.1000) |
Depending on the main terms and conditions outlined by the TRP scheme, the fee that a TRP charges the assessee may be less than the Rs. 250 that is due.
Who Can File Returns Through TRPs
TRPs can help individuals and HUFs file their income tax returns. An income tax return, however, cannot be prepared and filed by TRPs if
According to the Income Tax Act of 1961, an audit of the individual taxpayer who conducted business or practiced a profession during the preceding year and the business or profession's accounts for that year must be conducted.
The individual taxpayer spent the previous year living elsewhere.
Section 142(1)(i), Section 148, or Section 153A require the individual taxpayer to respond to a notice by filing an income tax return.
TRPs are not permitted to file a revised income tax return unless the taxpayer files the original return using a TRP.
Records to be Maintained by TRPs
Name of the individual for whom the TRP has prepared the returns.
The Assessee's PAN.
The date of submission of the return.
The acknowledgement slip's number.
The assessing officer's jurisdiction.
The entire amount of money reported on the return.
The total tax that the assessee is required to pay.
Conclusion
The income tax department launched the tax return preparer program to make filing tax returns easier and more effective. Under this plan, the income tax agency trains people to help taxpayers prepare and file their income tax returns for a low price or for free because the income tax department pays TRPs directly.
FAQ
Q1. What is a TRP for ITR filing?
A Tax Return Preparer (TRP) is trained and approved by the Income Tax Department to assist taxpayers in filing their income tax returns. Although they don't have to be tax attorneys or chartered accountants, TRPs are qualified to assist people with filing their taxes for a small fee.
Q2. I got my original return filed from TRP. Is it mandatory for me to file the revised return from TRP only?
Yes, a Tax Return Preparer can assist in filing the amended return if the original is filed with TRP.
Q3. Is the return filed from TRP valid?
Indeed, an ITR submitted through TRP is as legitimate as one submitted through any other source.
Q4. Can an audit be done by a TRP?
No, TRPs are not permitted to carry out audits.
Q5. How can I get an appointment with a tax preparer?
Taxpayers can schedule a meeting with a TRP via the official TRPS website. Depending on the city in which they live, the taxpayer may choose to use the services of the appropriate TRP. TRP appointments can also be arranged by calling the helpline at 1800-10-23738 or emailing helpdesk@trpscheme.com.
Q6. What are the Charges of a TRP?
Since TRPs are compensated directly by the Income Tax Department, they typically assist taxpayers in filing their returns at no cost. Their compensation is determined by how much tax you owe. In the first year, TRPs will get 3% of the tax paid on the returns prepared and filed for each new assessee (up to a maximum of Rs. 1,000), 2% in the second year, and 1% in the third. The fees are Rs 250 starting in the fourth year.
Q7. What are the objectives of the TRPS?
To achieve the following goals, the government launched the Tax Return Preparer Scheme:
Give graduates who are unemployed or only partially employed jobs.
Reduce the cost of compliance for small taxpayers.
Expand the base of taxpayers.
Raise public awareness of tax regulations; and promote community involvement.
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