What is Tax Return Preparers (TRP) Scheme, 2006?
Filing Returns with Tax Return Preparers (TRP) Scheme, 2006
For first time tax payers, there is an interest scheme called the TRP scheme which was launched in 2006 with a view to incentivizing of employment generation in the service sector. The TRP gets an incentive of 3% of the tax paid by an individual or Rs.250 per return, whichever is higher. This is a basic minimum assurance to the TRP. Let us understand this calculation more clearly. Suppose your total Income-tax payment for the financial year 2016-17 comes to Rs.12,000. Let us presume that this is your first year of filing your Income-tax Return. Now in this situation the Income-tax Department would pay Rs.360 (3% of Rs.12,000) as incentive to the TRP. Since the incentive is already more than the minimum payment of Rs.250, you have to pay nothing. In another instance, let us assume that you are first time tax payer and your tax paid is Rs.7,000. The TRP in this case receives Rs.210 (3% of Rs.7,000) as an incentive and you will have to shell out the balance of Rs.40 to the TRP for filing the Income-tax Return. The maximum fee in the first year cannot cross Rs.1,000 and from the second year onwards the fee is restricted to Rs.250.As a taxpayer, you have different options to choose from for filing your returns. It is always better you use the own filing method which costs nothing and you also get to learn the nuances of taxation. Also, most of the tax advisors cannot give you a proper advice on tax saving and it is best you consult with your financial advisor for this purpose. Above all, ensure that the tax savings investments that you make are in sync with your overall financial plan and your overall investment allocation.
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