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Rediff News  All News  » Business » Tax return preparers may also file service tax returns

Tax return preparers may also file service tax returns

January 08, 2008 12:54 IST

Encouraged by the success of the tax return preparers' scheme for individual income tax payers, the finance ministry plans to introduce a similar scheme for small service tax payers from next fiscal.

Finance Minister P Chidambaram is expected to make this announcement in Budget 2008-09. The move is aimed at helping small service providers, finance ministry sources say.

The Central Board of Excise and Customs has already drawn up the plan, say sources. The preparers will be encouraged to bring in new service tax assessees.

Service tax is a progressive tax and is going to be the largest contributor to the indirect tax revenue in the next few years after services are covered comprehensively. At present, 100 services are taxed by the central government.

The TRPs helping individual tax payers will also help those paying service tax. "This will help the tax payers, who will be able to take help from one TRP to file income tax as well as service tax returns instead of going to different tax advisors," a source said.

This will provide more work to the TRPs round the year and improve their earnings. Banks and insurance companies have also been advised to utilise the services of the TRPs to sell their products.

The TRPs get 3%, 2% and 1% of the tax amount paid by a new income tax assessee as commission in first year, second year and third year, respectively. The fee for older tax payers is Rs 250.

The TRPs certified in May after a short training course has filed 40,000 income tax returns till December.

The scheme was launched in May 2007 as a pilot project in 100 centres across the country.

Out of the 3,737 certified TRPs, about 2,000 are active. The rest have either taken up higher studies or a better paying job.

The TRP scheme for income tax will be further fine-tuned this year and will be expanded to new locations in the country. More youngsters will be trained for the job this year with the help of technical training institute NIIT.
Prashant K Sahu in New Delhi