As the deadline for filing income tax return (ITR) approaches, numerous individuals and businesses seek the expertise of Chartered Accountants (CAs) or professional tax filers to aid in the completion of their Income Tax Returns (ITRs), while some opt to rely on family, friends, or other acquaintances for assistance. While this can be beneficial in ensuring accurate and timely filing of our ITR, it is crucial to exercise caution when delegating this responsibility, particularly when sharing sensitive information with individuals who may not be well-versed in tax matters.

It is crucial to remember that your financial information holds significant value, encompassing all your investments and earnings for the year. It is possible to overlook the prevalence of scams in today’s world. Here are several important considerations to bear in mind before disclosing your ITR details.

Verify Credentials and Experience

Before entrusting someone with your financial information, it is imperative to verify their credentials. Ensure that the CA or tax filer is registered with the Institute of Chartered Accountants of India (ICAI). You can check their membership status on the ICAI website. Additionally, inquire about their experience, particularly in handling cases similar to yours. An experienced professional is likely to be more adept to ensure accurate filing.

Understand Their Service

It is good to know about the scope of services the CA or tax filer will provide. Will they only prepare and file your ITR, or will they also offer advice on tax planning and compliance? Understanding this will help you gauge whether their services align with your needs. Moreover, discuss the fees upfront to avoid any hidden charges later.

Ensure Data Security

Adhil Shetty, CEO of Bankbazaar.com, says, “Your ITR contains sensitive personal and financial information. Before sharing these details, ensure that the person has data security measures in place. Inquire about how they store and protect your data, both in physical and digital formats. They should use secure communication channels and data encryption to prevent unauthorised access.”

Maintain Copies of Documents

While you may share your financial documents with a CA or tax filer, always keep copies for yourself. This includes income statements, Form 16, investment proofs, and any correspondence related to your tax filing. Having your own set of documents ensures you can cross-reference and verify the information filed on your behalf.

Use Authorised Channels

When sharing documents and information, use authorised and secure channels. Avoid sending sensitive information over unsecured emails or messaging apps. Instead, use secure file-sharing platforms or hand over physical copies in person. This minimises the risk of data breaches.

Review the Filed ITR

Before the ITR is filed, request a draft copy and review it thoroughly. Ensure that all the details are accurate and reflect your financial situation correctly. Verify income details, deductions, and exemptions claimed. If you notice any discrepancies, address them with the CA or tax filer immediately.

Check Compliance with Deadlines

Ensure that the CA or tax filer is aware of the relevant deadlines for ITR filing. Missing deadlines can lead to penalties and interest charges. Stay informed about key dates and follow up regularly to ensure your ITR is filed on time.

Confidentiality Agreement

Consider signing a confidentiality agreement with the CA or tax filer. This legally binds them to protect your information and prevents them from sharing it with unauthorized parties. It adds an extra layer of security and ensures your data is handled with care.

Post-Filing Support

Inquire about the support they offer post-filing. This includes addressing any queries or issues raised by the Income Tax Department, assistance with rectification or revision of returns if required, and guidance on tax refunds. A reliable CA or tax filer will provide continuous support until the process is fully resolved.

By verifying credentials and ensuring data safety, you can ensure a smooth and secure tax filing experience. It is essential to comprehend the procedures before and after filing. Additionally, in the event of any inaccuracies in filing, it is imperative to have assistance readily available to navigate through tax complications, particularly after significant transactions or the sale of properties involving substantial amounts.