How much is your tax filing really worth? Uncovering the range of CA fees

Tax filing fees: With the tax filing season in full swing, the cost of hiring a Chartered Accountant (CA) varies widely, from as low as Rs 1,000 for simple returns to Rs 20,000 for more complex filings.

Online tax assistance platforms like ClearTax offer pricing plans such as Rs 2,299 for basic services and Rs 2,999 for advanced support. However, according to Motilal Oswal, the cost for Chartered Accountant (CA) services, which manage the entire tax filing process from preparation to submission using documents like Form 16 and Form 26AS, typically ranges from Rs 1,500 to Rs 2,000, depending on the complexity of the returns.

What taxpayers say?

ITR-1 (Salaried Individuals)

Many taxpayers believe that paying Rs 1,000 to Rs 1,500 is a fair range for CA services in filing a straightforward ITR-1. Prahallad Swain, who serves in the Indian Defence, shares that he consistently pays Rs 1,500 for his ITR filing, finding it a reasonable expense.

Amit Das, a salaried professional in Odisha said “Last year, I opted for a CA for my ITR-1 and paid Rs 2,000. While it was convenient, I felt it was a bit steep for such a simple return.”

CA and personal finance expert Arpit Suri agreed, saying, “For straightforward returns like ITR-1, spending around Rs 1,500 should be reasonable. If a CA charges more, ensure they provide added value, such as tax-saving tips and personalised advice.”

ITR-2 (Individuals with Multiple Income Sources)

Taxpayer Abhishek Yadav, a freelance graphic designer, highlighted her experience with ITR-2 filing fees. She reveals, “I paid Rs 3,500 for my ITR-2 last year. For those with more complex returns, around ₹4,000 seems fair, provided the CA offers a detailed analysis and comprehensive support.”

ITR-3 (For Professionals and Business Income)

Adarsh Jha, a small entrepreneur based in Bangalore who runs a recruitment agency, shares his experience with ITR-3 filing fees.

“I spent Rs 7,500 on my ITR-3. Ideally, it should be between Rs 6,000 and Rs 8,000. However, I don’t mind if the CA charges up to Rs 10,000, as long as they provide thorough support during the scrutiny process,” Jha said.

Similarly, small shop owner Pooja Gupta reflected on her ITR-4 filing fees, saying, “I was charged Rs 5,000 for my presumptive income return. For this type of return, anything above Rs 4,500 might be excessive unless the CA offers comprehensive support and valuable guidance.”

ITR-5, ITR-6, ITR-7 (For Firms, Companies, Trusts)

Arpit Suri stressed that the cost clearly differs for individual and company returns. “For complex returns such as ITR-6 and ITR-7, costs can escalate up to Rs 20,000. It’s crucial that the CA’s expertise justifies the fee, as these returns involve intricate details and substantial reporting,” he explained.

Filing taxes yourself vs Using a CA

Filing Yourself:

• Pros: Cost-effective, empowers you with knowledge of your finances, and is relatively straightforward for simple returns.
• Cons: Time-consuming, potential for errors, and lack of professional tax-saving advice. Handling disputes or compliance issues can be challenging without professional support.

Filing through CAs:

• Pros: Expertise in handling complex returns, comprehensive tax planning, and reduced risk of errors. A CA can also offer guidance on tax-saving strategies, handle queries from the Income Tax Department, and provide support in case of disputes or compliance issues.
• Cons: Higher cost, which might not be justifiable for simple returns. However, the investment in professional help often pays off by ensuring accuracy and avoiding penalties.

How can a CA support beyond tax filing?

Chartered Accountants are essential in managing disputes with the Income Tax Department and ensuring compliance with tax regulations. Suri pointed out, “I handle client representation during audits, respond to tax notices, and ensure that returns meet all regulatory requirements. If any issues, such as discrepancies or objections from the tax department, arise, my role is to address and resolve these effectively.”

Choosing between filing your taxes yourself or hiring a CA depends on the complexity of your return and your comfort level with tax matters.