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Why Do You Need a Tax Consultant?

The primary role of a tax consultant or a tax advisor is to help people and organizations in paying their taxes. They hold expertise in tax law, tax compliance, and tax planning. Both individuals and business owners can hire a tax consultant for long and short-term tax optimization. They help in making tax returns and work closely with their clients to minimize their tax liabilities throughout the year.  Hiring one doesn’t cost much and can help you pay only the required tax and avoid any tax liabilities at the end of the financial year.

How Do Tax Consultants Work?

Tax consultants know all about tax regulations under the Income Tax Act of India that individuals and businesses must abide by when filing their taxes. You can seek advice from a tax consultant over the phone or meet in person to file your income tax correctly. Apart from tax filing a tax consultant in India also offers assistance for the following:

  • Tax documentation
  • Filing e-returns
  • Tax filing for freelancers
  • Evaluating a tax payer’s legal and financial circumstances to determine his/her tax liabilities
  • Completing tax forms like Form 16, Form12 B, etc. and submit them on the Income-tax website and send it to the Bangalore office
  • Help you make legitimate investments like life/term insurance, health insurance, pension plans, child plans,  and other tax-saving schemes by the government

What is the Difference Between a Tax Consultant and an Accountant?

The role of an accountant generally involves maintaining annual accounts of firms as well as filing their tax returns, analyzing business performance reports, tax audits, and providing general tax advice. They also advise reducing a company's tax obligations. Simply put, their role involves making strategic financial decisions.

Tax consultants hold a strong knowledge about the Income-tax laws and can offer you legal tax advice. But make sure that he/she is either running a tax advisory firm or is a practitioner of tax-related issues before you consult one. He should also hold a certificate of practice. They can help you in tax planning throughout the year and not just before the end of the financial year.

Therefore an accountant performs all-encompassing roles whereas a tax consultant specializes in tax norms. Some accountant can also give you tax advice and help you in budgeting but hiring a tax consultant makes more sense as he would hold a comprehensive knowledge.

What is Better a Tax Consultant or a Tax Software?

Recently, tax software has become quite popular as they offer both ease and convenience. As a result, a number of Indians are able to file their taxes on their own.  But software is not a replacement for a tax consultant with whom you can speak over phone, meet in person, and seek financial advice round the year.

You can’t have a face to face discussion and do financial planning or even manage your investment portfolio. Tax software cannot ensure you peace of mind that you have filed your taxes correctly. Whereas a tax consultant can help you make the right financial decisions and stay worry-free. 

Benefits of Hiring a Tax Consultant

Know about Your Tax Deductions

With the help of a tax consultant, you can easily identify your potential tax deductions in a year and advise you how to make strategic investments to avoid any tax-liabilities in the future. A good tax consultant can advise you effective methods to save on taxes in the most legitimate manner and improvise your financial portfolio. For instance, if you hire a tax consultant in India, he would identify significant tax deductions from your account, and help you save hundreds or thousands of rupees by filing your tax return, in return for a small fee.

Saves Time

Most of us end up filing taxed at the end of the year. And end up making investment decisions hastily. It takes a lot of time and effort to ensure that your income tax return is filed correctly. So a tax consultant would dig up your financial portfolio and double-check all your income and savings before you can start file your income tax returns. They can also suggest you to effectively manage your financial portfolio.

Its Safe and Hassle-free

It is always better to seek an expert’s advice when in doubt, especially regarding your finances. A tax consultant can maintain your tax records in the safest and legal manner without the need of you running from pillar to post.

He is also your Tax-Advisor

Even if you do not hire a tax consultant he can still offer you some tax advice. You seek updates from him when needed and do the leg work yourself.

In a Nutshell

As you can see a tax consultant can solve all the financial queries that would otherwise be holding you back from making right financial/investment decisions. Whether you are an individual or run a business you can hire a tax consultant to help you in tax planning and compliance.

Written By: PolicyBazaar - Updated: 20 November 2020
Tax Saving Investment
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