Certified Tax Return Preparer is on the Horizon in India

Indian Finance minister P Chidambaram launched the tax return preparer (TRP) scheme in this month. This idea is borrowed from US where Tax Preparers are already in vogue. This is a good idea on the part of the Government.
As part of the scheme, the finance ministry will appoint 5,000 graduates with basic accountancy skills. In the current fiscal, the scheme is being launched only on a pilot-basis to train 5,000 TRPs at 100 centres in about 80 cities across the country.
The Income Tax Department and NIIT will then train them for nine days. At the end of the training programme, the graduates will be awarded a certificate and an identity card. The trained candidates will be referred to as `Certified Tax Return Preparers' and obtain a unique identification number from the Income Tax Department. The tax return preparers are meant to file returns of income tax payers in the lower income category. The certification programme will be over by February next year, at the time of preparing returns in April.
Under the programme, NIIT will provide special training material on the subject, developed by Taxman, a publishing house dealing in tax-related matters. All such tax return preparers would have access to a Web-based knowledge portal, for any special support while filing the returns, throughout the year. Graduates interested in this scheme can apply before 24th November, 2006 by visiting www.trpscheme.com.
The TRP will get a fee of Rs 250 from old tax payers for preparing their tax returns. However, for every new tax payer the TRP brings in, he will be reimbursed 3% of the tax collected in the first year, 2% for the second year and 1% for the third year, subject to a maximum of Rs. 1000.
The rationale behind this system of reward is that the TRPs would operate like insurance agents and bring in new taxpayers in order to get more fees, Chidambaram said. It will also solve the problem of “stop filers”, people who file returns for a year or so and then stop filing their returns.
Given the fact that around 25-30 lakh new tax payers join the tax fold every year, the scheme is likely to have a big impact.

Taxpayers who pay someone to do their taxes should choose a preparer wisely. Taxpayers are ultimately responsible for everything on their return even when it’s prepared by someone else. Taxpayers can use the following tips to choose a preparer who will offer the best service for their tax preparation needs.
• Ask about service fees. Avoid preparers who claim they can obtain larger refunds than other preparers, or those who guarantee results or base fees on a percentage of the amount of the refund.
• Plan Ahead. Choose a preparer you will be able to contact after the return is filed and one that will be responsive to your needs.
• Identity. Ask for the identity card issued by the Tax Department.

Further details of the Tax Return Preparer Scheme can be viewd at http://www.trpscheme.com/trp/index.jsp