How does a CA help in tax planning?
Updated: Jul 27
Tax planning is not an act of evading the taxes, but to minimize them by availing the benefit of the allowances, deductions, rebates, concessions, and exclusions available well within the statutory framework. In reality, it is not as easy as it looks. A CA is well versed with all the laws and can assist with the best suitable options to provide the maximum possible tax benefit scenario, along with establishing your financial goals.
In what ways can a CA help you? The rapid change in Economy is a big challenge for the professionals to well verse with the in-depth knowledge of the changes occurring in the financial environment, their consequences and its measures. Doesn’t matter the size of the organization, each one needs a good consultant which could ensure them for profit earning and other compliances
Various other specific roles of a CA:-
Accounting and Auditing
A Chartered accountant is well trained with this financial analytics, which enables him inefficient maintenance of accounts and financial statements. Since Auditing ensures the users of financial statements in the accounts presented before them are prepared on the correct accounting principles and laws, a CA is entrusted with the responsibility of auditing them.
A CA as a management consultant performs a lot of consulting services such as designing the budgetary and controls system, advisory services for effective production policies, Mergers and Acquisitions, analyzing market opportunities, appraisal of the policies and processes, assist in problem-solving in the operational matters, etc.
Fair valuation of assets and liabilities
CA’s are well versed about the various methods of valuation of the assets and liabilities needed in various transactions such as investments, divestments, mergers, demergers, JVs, equity-swaps, purchase or sale of assets including intangible assets, etc. Also during Compliance and Disclosure, including fair-value statements and restatements under Indian GAAP (including the new IndAS), IFRS & US GAAP, for matters such as Impairment testing, Purchase Price Allocation, valuation of Financial Instruments, ESOPs, etc.
Registration of companies, LLP’s & firms
Chartered accountants (CA) or company secretaries (CS) are authorized to approve and certify all the documents that are required in the company registration process. Approval& attestation by a CA/CS is required before uploading it to the MCA website for company registration in Delhi or any other state in India.
Due diligence &Investigation of fraud
For their expertise and trustworthiness, CA’s are hired to investigate the fraud occurring in the organization and report it to the higher authorities or to the Government in case hired in a special circumstance.
Role in lifting-up the Start-ups
After the implementation of new start-up schemes, CA is proving to be donning multiple roles as they mainly involved in e-commerce activities, which has a different transaction process than the normal trading activity, and thereby the rules, laws, and taxation applied on them are quite different. Also, other subsidies or liberalizations offered to the start-ups and its impact & consequences need to be understood perfectly before availment, which a CA can effectively fulfill. So now it is essential to measure and understand how chartered accountants can help entrepreneurs to run a profitable and successful venture.
Registrations of Society and Trusts
The rules for society registration/Trust registration/NGO registration are quite different than the normal company registration, which a layman may not understand. Even the compliances are different, which an expert CA can easily point out and save you from the headache.
Taxation services to NRI’s
An NRI is liable to file tax returns in India if he either owns an asset or has taxable income in India. CA’s are well equipped with circumstances like the inheritance of wealth by NRI, the transaction of sale/purchase of properties, active businesses in India or simply have investments in shares / NRE deposits in India. All these compliances require NRIreturn filing in India &assistance to save taxes and at times repatriate the funds out of /in India. Keeping the above transactions in mind, a CA assists in filling the NRI’s tax return in India.
Compliance with all new GST laws
With the onset of GST, transactions and its effects have become even more complicated. The reports that need to be filed every month, quarter, year & the rules for the ITC claim, settlement or its limitation period. All these are troublesome for a layman. Any lapse might lead to huge losses & affect the working and the profitability of the business. In such a case, a CA can turn into a knight of the armor and take you safely from this storm equipped by his knowledge, expertise, trustworthiness, and experience.
Registration of Trademark
Trademark registration involves chronological step by step process as mentioned below:-
Checking availability of proposed name with the device
Filling Application documents
Filling reply against objections
Ensuring issuance of the registration certificate.