With the Saral form for filing returns no longer so saral, you need to look beyond a chartered accountant's ability to simply file your tax returns. Moneycontrol tells you how to pick the right person.
Your neighbour's CA may not be suitable for you
Different CAs specialise in different areas. So choose a CA who will satisfy your needs. For instance, there are CAs who specialise in individual taxation, some for non-resident Indians, some in service tax, some specifically in procedural matters and others who blend taxation and investment advice and so on.
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If you are an entrepreneur or a small businessman, you would need a CA who has a small business focus. He should be able to give you a solution for all your business needs. Assess your needs and pick a CA who will fulfill those needs.
Choose early
It is important to choose an accountant early on in your career and build a relationship with him. There are a number of advantages to that. First, over time, your relationship with the accountant will ensure that he understands your needs and advises you well. Second, since you will be revealing vital information about your income to the accountant, it would make sense to stay with the same accountant. There's no point disclosing details to too many consultants.
All about the new tax return form
More than just tax returns
Ask your CA what services he will provide you. Ideally a CA prepares your tax returns, files the same, pays taxes on your behalf and maintains all records. However, a CA who also provides advisory services, such as how to save taxes and how to make the best investments, will be a bonus. Most of the time, your tax needs and investment needs are interconnected. Hence, a multi-faceted CA will help rather than having many consultants for different needs.
Ask the SMART questions
- How many clients do you service?
- What is your typical client base - individuals, businesspersons?
- How much experience do you have with my type of personal situation or business?
- Will you do my tax return or does someone else handle it?
- What educational update programmes have you taken within the past six months? In India, the Institute of Chartered Accountants expects its members to undergo a Continuous Professional Education, CPE programme to ensure that they are abreast of recent developments. Find out if your CA has done the needful.
- What other services does the firm offer?
- Can you give me a reference or two?
Negotiate fees in advance
Accountants normally charge separate fees for filing returns, scrutiny of account books and if he's available at your beck and call. Clarify all the applicable fees in advance.
Ensure record maintenance
This is an important back-office criterion. Keeping records is very important as they may be required in future. Check if the CA has a provision to keep your records safely. While you must keep photocopies of all documents, it would be better if your CA also maintained a separate set.
Professional Liability insurance
If your stakes are high and even a small slip on the part of your accountant can lead you to trouble, check if your accountant has a professional liability insurance cover. These policies are now also available in India.
Coverage includes wrongful professional acts, including negligent acts, errors and omissions and defamation. Loss of documents (and computer system records) up to a predetermined sub-limit, and compensation for court attendance can also be covered.
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