Why Do You Need a Tax Consultant?

A tax consultant is an expert who guides individuals as well as businesses on tax-related matters. Whether you are seeking to minimize your tax liabilities, ensure compliance with ever-changing tax laws, or make informed financial decisions, a tax consultant plays a pivotal role.

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This article explores the essential reasons why you need a tax consultant and sheds light on the benefits they bring to your financial well-being.

What is 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.

How Does a Tax Consultant Help You?

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. 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 taxpayer’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 them 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 key differences between a tax consultant and an accountant are mentioned in the table below:

Aspect Tax Consultant Accountant
Primary Focus Specializes in tax laws and codes, providing tax-related advice and optimization. Offers a broader range of financial and accounting services, including auditing, financial analysis, and more.
Expertise Specialized in tax planning and tax law compliance. Trained in general financial management and record-keeping.
Scope of Work Focus on minimizing tax liabilities and maximizing tax benefits. Handle financial transactions, audits, and general financial advice.
Tax Preparation and Filing Assists with tax return preparation, ensuring adherence to tax laws. Prepares financial statements, tax returns, and handles audits as needed.
Year-round Services Offers tax advice throughout the year, especially during tax season. Provides year-round services such as financial consulting and planning.
Licensing and Certifications May hold licenses or certifications, such as Enrolled Agent (EA) or Certified Public Accountant (CPA). Typically holds CPA (Certified Public Accountant) certification or other relevant certifications.

What is Better, a Tax Consultant or a Tax Software?

Recently, Tax Software has become quite popular as it offers 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 the phone, meet in person, and seek financial advice around 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 your peace of mind that you have filed your taxes correctly. At the same time, a tax consultant can help you make the right financial decisions and stay worry-free. 

Benefits of Hiring a Tax Consultant

The major benefits of hiring a tax consultant are as follows:

  1. 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 on how to make strategic investments to avoid any tax liabilities in the future. A good tax consultant can advise you on effective methods to save on taxes in the most legitimate manner and improve your financial portfolio. 

    For instance, if you hire a tax consultant in India, he will 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.

  2. Saves Time

    Most of us end up filing taxes 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 filing your income tax returns. They can also suggest you to effectively manage your financial portfolio.

  3. It is 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 most legal manner without the need for you to run from pillar to post.

  4. 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

A tax consultant is essential for navigating the complexities of taxation. They ensure compliance with tax laws and optimize financial outcomes. Their expertise can save you time, money, and the stress associated with tax-related matters. This makes them a valuable asset for individuals as well as businesses.

FAQ's

  • What is work done by a tax consultant?

    Tax consultants provide tax advice and support to individuals, businesses, and organizations on various tax issues. Their work typically involves:
    • Preparing and submitting tax returns

    • Researching tax laws

    • Advising on tax planning

    • Representing clients in tax disputes

  • What is the difference between a tax consultant and a tax practitioner?

    The main difference between a tax consultant and a tax practitioner is that a tax consultant typically has a broader range of expertise and experience than a tax practitioner. Tax consultants may have a background in accounting, finance, or law, and they may specialize in a particular area of tax, such as estate planning or international taxation. Tax practitioners, on the other hand, may have less specialized experience and may focus on preparing tax returns and providing basic tax advice.
  • Is tax consulting a profession?

    Yes, tax consulting is a profession. It is a recognized occupation that requires specialized knowledge and skills. Tax consultants provide expert advice and support to individuals, businesses, and organizations on a variety of tax issues. They typically have a background in accounting, finance, or law, and they may specialize in a particular area of tax, such as estate planning, international taxation, or tax compliance.

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