Tax season is here, folks! So, here is some unbiased, no BS advice on whether you should plan your own taxes or hire a CA.
Taxes are important, whether you like it or not. Every working individual has to come to terms with this reality year after year. However, the good news is if you plan your taxes right, you can save a substantial amount on your hard-earned money. This poses the age-old question, ‘should you plan your own taxes or hire a CA?’
Now, planning your taxes is somewhat like cooking, in the sense that you can only cook a wonderful dish if you know the recipe. Besides, you need to have all the right ingredients in the right proportion. Let us make it simpler for you. Answer the following questions with a simple ‘Yes’ or ‘No’:
- Do you know where all you can save taxes?
- Do you how to how much you can save under section 80C?
- Do you know how to calculate the HRA?
- Do you know how much you can save with health insurance and term insurance premiums?
- Do you know when is the right time to plan taxes?
If you answered ‘Yes’ to the above-mentioned questions, then, go the DIY route. Plan your own taxes without hesitation. However, if you answered ‘No’ to any of these questions, then we advise you to consider taking professional’s help.
How to assess your tax situation?
Assessing your tax situation is not that hard. You just need to be aware of your income source(s), liabilities, investment status and general tax regulations.
Imagine you’re a salaried employee with fixed income and/or pay one or two monthly installments. These could be for a personal, home or education loan. Having no other financial obligations whatsoever, it is safe to say that your tax situation is fairly simple. Consequently, planning your own taxes would be easy. Why pay someone else to do a job that you can do on your own, right?!
Here’s another quick quiz to give you more clarity. Answer the following questions with a simple ‘Yes’ or ‘No’:
- Have you made a considerable amount of investments to save tax?
- If not, are you considering exploring the investment world?
- Do you have more than one source of income?
- Do you have a dependent family and multiple liabilities to pay?
- Do you want to save more tax legitimately but don’t know how?
- Do you completely understand tax planning and filing?
If you answered ‘Yes’ to any of the first five questions and ‘No’ to the last question, we would advise you to seek professional expertise.
Can you plan your own tax even if your tax situation is a bit complicated?
Of course! You can. However, be aware of what you are signing up for. You must understand that planning your taxes is fairly complicated yet crucial. Plan your own taxes only if you have enough time and patience to get down to the nitty-gritty of the do’s, don’ts, cans, and cannots of tax-saving opportunities. This also involves understanding what deductions you qualify for in sync with the changing tax laws. If time is an issue or you are unwilling to dive into details, then don’t even bother!
For instance, take a look at these people who ended up spending more while trying to save tax; all because they “thought” they understood everything. So, again, if you do not have enough time and patience, or do not understand the technicalities of planning tax properly, you would be better off taking professional help. Remember, there is no shame in asking for help. Be smart enough to know when you need it.
Definitely look for professional advice if you’re in a high-income bracket!
If your annual income or turnover is more than INR 50 lakhs, then your tax returns are more likely to be scrutinized. Even a slight slip up can provoke legal trouble. A professional can help you assess your options, give better investment advice, and push you in the right direction.
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In conclusion, it is practically impossible to try and grasp everything you need to know about tax planning in a matter of a few days. So taking professional help is probably your best option, especially if your tax situation is a bit complicated and/or if you are trying to save more tax by taking a chance in investment. For any further queries or clarification, write to us at firstname.lastname@example.org