The Government of any country is always serious about tax collection as it is a significant source of revenue for carrying out welfare schemes and development activities for the citizens. Therefore, the defaulters in payment of tax are dealt with stringently. It is the reason why Companies need to ensure all tax compliances are timely. Moreover, it is a part of their corporate social responsibility. Thus we have tax advisory services.
Companies contribute significantly towards revenue generation and are a major creator of wealth for the nation.
There is no reason for a company to avoid taxes if it is earning taxable income. Corporate needs to focus upon the business activities and making profits more than anything else. One may require the guidance of experts to ensure that all business activities conform to the rules and regulations.
The tax structure of India is not easy to understand. It is complicated and confusing at times. It is always better for the business houses if someone else is available to take care of the tax-related issues and compliances of all corporate laws for the smooth running of their business. No one likes to waste time in protracted legal battles with the Government Departments and other business fraternities. Expert advice and assistance in ensuring the observance of government rules and regulations are always welcomed.
Recommended reading: Corporate Services Advisory
Table of Contents
Why Tax Advisory Services
There is no shortage of legal firms/companies providing tax-related advisory services, guidance, and assistance to corporate and individuals. The endeavor is to ensure tax compliance and save the seeker from the pain and trouble of bothering about the tax issues. Besides, there are many other reasons for offering such tax advisory services:
- There are frequent amendments in tax laws, and it is necessary to keep pace with them. Every year in the financial budget, the Finance Minister makes various recommendations related to tax. It can be changed in tax rates, tax slabs, surcharge, cess, etc. All the integrities of proposals and their effect on the company’s financial health are to be studied and understood well. The tax advisory professionals assist in the same and accordingly prepare and file tax returns.
- Handling Assessment Orders: The Tax authorities scrutinize the companies’ returns, raise the demand if there are any shortcomings, and issue assessment orders. It becomes imperative to reply the same, which may involve a lot of recalculation.
- Handling Litigation – The firms offering tax advisory services provide Tax-related Litigation and representation in courts and tribunals, both at initial stages and appeals. Any tax litigation demands proper assessment of the situation, strategy making, and study of various accounting statements. It is an arduous task that experts better handle.
- Communicating with Tax Officials and handling their queries -Liaising with the Tax officials is an important task. Since the tax laws are difficult to understand and interpret, it is not a child’s play to communicate with the tax officials while answering their queries. An in-depth understanding of the subject is required to save the company from any excess payment and default.
- Planning to save taxes: Taxes are planned while ensuring that the requisite tax amount is paid and extra is avoided. Tax advisory services include making suggestions to the company and assisting them in long-term planning to make genuine savings and accurate tax payments. We need competent professionals who have experience in long-term financial and tax planning.
- Understanding the GST– The services include understanding the General Sales Tax and its payment and registration. GST is a new concept and has replaced various other taxes. Many people are not clear about its calculations. Tax consultants’ advice helps to understand and calculate the implications of GST on business transactions.
- Direct taxes like income tax and TDS of employees- A company has to deduct TDS for employees. At the same time, the company has to reward the employees for their contributions. A balance is to be maintained. The larger the company, the more are the issues. Tax advice on such matters always proves beneficial.
- Tax refunds – If a company has paid excess tax erroneously, the tax firms manage to get the refund.
Recommended reading: Set up legal entity in India
The tax professionals’ advice on the complexities of compliances ensures that the rules and regulations do not become a burden. The companies seek Tax Advisory services of professionals/tax experts so that they do not fault in tax payment.
FAQs
Yes, tax advisory services include long-term financial planning for saving taxes and paying accurate and appropriate taxes.
GST is a new concept and is a part of every business transaction. The Tax Advisory services offered by legal firms help to study the impact of GST on business transactions.
The tax advisory services include services of tax advocates who select the best strategy for defending the cases in courts and tribunals, besides providing for representation.
Assessment orders are assessments of tax returns filed by the companies. The tax department will raise an issue if they find any fault with it.
The primary tax advisory services are filing tax returns, tax litigation, tax planning, ensuring tax compliances, handling assessment orders and queries from the tax department.
Indirect taxes – GST, VAT. Direct taxes – corporate tax, individual personal tax, TDS.
The tax structure is challenging to understand, and the tax laws must be complied with, therefore, such services.