TRP scheme to be revamped

To be extended to TDS, service tax returns.

The two-year-old income-tax return preparers (TRP) scheme will be revamped shortly to make it an attractive career option for the youth.

The finance ministry has now decided to extend the coverage of the scheme to tax deducted at source (TDS) and service tax returns to provide round-the-year work to the TRPs, as majority of existing prepares had shown signs of disinterest due to seasonality of their job. Previously, the ministry was planning to create a separate set of tax preparers for filing service tax returns.

The aim is to help small companies and firms who are struggling to file TDS and service tax returns on time, and also to provide sufficient income for existing tax preparers.

“Main problem was seasonal nature of income-tax return filing. With the addition of TDS and service tax returns, TRP’s will have enough work for the entire year to sustain themselves,” said Amitabh Kumar, head of the Resource Centre for TRPs, Department of Income Tax.

Another key change in the scheme will be to allow salaried persons to work as TRPs. This will immediately bring back into fold 700-

800 trained TRPs, who had taken up jobs elsewhere due to higher earning potential and became ineligible to continue as return preparers.

“We have been anxiously waiting for permission to file TDS and service tax returns. It is very important for us to become full-time tax professionals,” said Nijoe Paul, a Bangalore-based TRP.

Out of a pool of 3,000, less than 25 per cent of TRPs are active now. While the more active TRPs earn anywhere between Rs 1,00,000 and Rs 1,50,000 a year, others earn as little as Rs 3,000, said a senior revenue department official. The department had certified 3,737 TRPs in July 2007 to help individual taxpayers file returns.

While Rs 250 are paid for filing tax returns of people who had filed earlier, a fixed percentage of tax collected from new tax payers are paid to TRPs.

Nearly all TRPs have expressed willingness to be part of the extended scheme and the training is likely to be completed by February next year, said an official. The existing third party trainers — NIIT Ltd, an IT education training provider and Taxmann, a leading legal and tax books publisher — will be retained for TDS and Service Tax scheme.

The remuneration from preparation of TDS returns and service tax returns is likely to be higher. As against the fixed rate of incentive for filing an income-tax returns, the TRPs will be given flexibility to charge market fee per TDS return and service tax return.

While income-tax return-filing is once in a year, the TDS returns are filed every quarter and service tax returns are filed half-yearly.

The TRPs are likely to be trained in service tax and TDS return-filing shortly to enable them to file them such returns from March next year.

The TRPs have filed about 40,000 returns in 2007-08 and the remuneration they got were less than Rs 1 crore. The numbers are likely to be in the same line for 2008-09 also.

After taking lessons from two years of experience, the TRP scheme will be made more robust and there will be more active TRPs next year, Kumar said. Another batch of 5,000 youngsters may also be trained next year to take up the job of TRPs, sources said.