Tax return preparers to get 3% of incremental revenue

Over 5,000 tax return preparers that the government plans to recruit will be able to earn as much as 3 per cent of the additional tax they collect under a scheme to be proposed this month.

The novel idea, mooted by the finance ministry, is also aimed at increasing the number of tax-payers by providing incentives.

At present, there are just 40 million income tax-payers in India, with a population of over 1 billion.

Under the tax return preparers' scheme, to be launched as a pilot project on September 1 this year, the return preparers will be allowed to keep a certain percentage of the tax collected from a new tax-payer.

The percentage will vary from three per cent of the tax collected from the new tax-payer in the first year to two per cent in the second year and one per cent of the tax in the third year, a top finance ministry official told Business Standard.

This incentive will be in addition to a fixed payment of Rs 250 per return that is to be collected by the return preparer from the client.

Officials said the revenue department had decided to tie up with NIIT to train unemployed graduates as tax return preparers. "We have decided to initially go with NIIT. We will pay it Rs 2,000 for training each candidate," the official said, adding that 5,000 graduates would be trained in the first year.

The services of the tax return preparers can be used by the self-employed and small businessmen with a total income of less than Rs 3 lakh per annum.

The tax preparers have to be law or commerce graduates. The revenue department is in the process of setting up a "Resource Centre" in Delhi, which will be a separate directorate headed by a commissioner.

The Centre will act as a nodal agency for coordinating with the National Academy of Direct Taxes and NIIT to ensure proper implementation of the scheme.