A tax practitioner determines and guides the issue of taxation to an enterprise. Most people are confused about How to become an income tax practitioner. What are the requirements to become an ITP?
Tax practitioners work in three sectors as they can become an ITP with SARS, can work with the industry or commerce, or start their private practice. Those who have completed their tax returns or work as an employee with tax returns are not needed to become a tax practitioner.
In this article, we are discussing how someone can become a tax practitioner? What are the duties as an ITP? What is the procedure of the registration? So when someone wants to become, they have a piece of complete knowledge about ITP? Now let’s proceed further with the topic.
What is an income tax practitioner?
Income tax practitioners are those who represent the income taxpayers in front of the income tax authority. This includes chartered accountants, lawyers, or those with a commerce degree. They do not need to register themselves to a federal government to represent the taxpayers to tax authority.
Moreover, those who have a degree in a BA, B.COM need to register themselves to the tax authority to become a candidate as a tax practitioner. But it is also optional so this will add value to his profile as a representative. The tax practitioners are a vast term, it includes the business structure, professional groups that provide a variety of services related to tax.
The categories of the income tax practitioners are tax preparers, agents, accountants, and the lawyer that deals with the law associated with tax. As we say that there is no definite explanation of the tax practitioners or the tax accountants, this will eventually allow anyone to build their own setup or business as the ITP without any legal requirement satisfaction.
What qualifications do someone require to become an income tax practitioner?
According to the rule the qualification to become an income tax practitioner are:
- Law degree with second division.
- Commerce degree with subjects such as income tax law and accounting.
- Degree in business administration and management with the subject of accounting, law at the very least.
- Bachelor of Accounting.
The degree must be from a qualified institute with an effective reputation. This will add value to the activity as an ITP.
Who can become an income tax practitioner?
They are categorized as representing the taxpayers or accessor in front of the tax authority.
- Those who have relations with the taxpayers according to clause (i) of subsection (2) of section 288 of the income tax act 1961.
- The IT access who manages to be the officer of the bank under the vide clause (ii) of subsection (2) of section 288 of the income tax act 1961.
- The practitioner such as the lawyer, advocates who are legally practicing in the India civil court vide See Section 288 clause (iii) (2) of the Income Tax Act of 1961.
- The CA or any company auditor vide Clause (iv) of Sub-section (2) of Section 288 of the Income Tax Act, 1961.
- Accountancy clear persons under the recognized board from vide Clause (v) of Sub-section (2) of Section 288 Read the Income Tax Act of 1961 together with Article 50 of the Income Tax Regulations of 1962.
- Commerce or a law degree passed from recognized universities from vide Clause (vi) of Sub-section (2) of Section 288 of the Income Tax Act, 1961 read with Rule 51 of the Income Tax Rules, 1962.
- Auxiliary personnel who have represented experts in tax authorities before this law, see Section 288 (2) clause (via) of the Income Tax Act of 1961.
- Those who are the income tax practitioner under India income tax Clause (vii) of Sub-section (2) of Section 288 of the Income Tax Act, 1961.
The above-described categories of those who are accountable to become an income tax practitioner are the first two (1,2) are casual with no provision for registration under the income tax act. The (3,4) they have already started their practice as the income tax practitioner with no provision for registration. The (5,6) are the right candidate to become the authorized representatives with the provision for registration.
The last two categories (7,8) may not be applicable for the ITP because they might be 70 years above. so, the categories of 5 and 6 with provision are those who are selected for income tax practitioner under Sub-section (2) of Section 288 of the Income Tax Act, 1961.
Tax practitioner registration
The practitioner who advises regarding the taxes to the application of income tax act needs to register with the SARS and from well-known controls as a tax practitioner. This few consideration in the registration process is:
- Companies or legal persons cannot be registered as tax clerks.
- All tax advisors must be registered separately;
- If the partner does not directly control the work of its employees, the registration is not limited to the “partner level” (SARS s240 (2) (d)) (ii) explanation);
Individuals working under the direct supervision of tax consultants, such as professional assistants and clerks or administrative personnel who provide consultations on their behalf, do not need to be registered and can use their doctor numbers;
- Partners or CC members cannot use each other’s doctor numbers-each must be registered separately.
SARS tax practitioner standard
The persons who have their tax return are not required to register as a tax practitioner. The standard of the tax practitioner is:
Tax practitioners have a qualification that is fit for registration in SARS
Now it is under the requirement that those who want to register as tax practitioners must have a level 4 qualification. The applicants are:
- FETC: bookkeeping NQF 4.
- National Diploma: NQF Financial Accounting 5.
- NQF assessment of small business financial management 4.
The NQF level 4 candidate must qualify for level 5 within three years of registration. This happens on eFiling.
Registration with recognized controlling body
SARS has various controlling bodies for tax practitioner registration, the Institute of certified bookkeepers and accountant (ICBA) has become a partner with SAIT for the registration facility of the tax practitioners. The members of the ICBA register as a practitioner in SARS through the SAIT controlling body.
What is the registration process for SARS?
For those who are registered with the SARS or not register the process is defined below:
The steps for the registration are given below:
Step 1: Log in to the eFiling website.
Step 2: Register yourself eFiling.
Step 3: As a tax practitioner register online.
There is no need to submit any other thing on eFiling just register as a tax practitioner.
Step 1: you need to verify the registration on SARS.
Step 2: if there is any change in the documents then modify them with the recognized controlling body. No need to register again registration just update it.
Duties of the tax practitioners
Moreover, the tax practitioner has the responsibility to represent the taxpayers in front of the income tax authority. The detailed duties of the income tax practitioners are:
- Tax practitioners must provide advice that is not gross negligence or is intended to help taxpayers avoid or improperly delay the performance of their obligation. Taxpayers depend on the tax practitioner’s advice.
- The knowledge of the income, corporation, capital tax is provided to the taxpayers by the tax practitioners.
- The tax return is assembled by tax practitioners.
- The tax practitioners help their clients to stay up to date related to the laws according to government standards. Different companies pay different tax That’s why the practitioners help them to pay their taxes.
- They help in the attainment of the tax-saving by following the techniques. The clients can lessen their tax by following the techniques proposed by ITP.
- They need to take care of the client’s interest and are not allowed to leak any personal information of any clients.
- They can communicate with legal advisors who are professionals.
- With the help of tax experts, tax reporting has been improved.
Tax practitioner’s role in business society
The role of the tax practitioners in the business society is described as follow:
Financial affairs of clients
The role of tax professionals includes handling the financial affairs of clients, as well as legal obligations to comply with tax laws and obligations to the profession and society. The need for non-technical or soft skills (such as communication) can reduce the uncertainty and vulnerability of customer trust and increase satisfaction with the services received.
Build client relationship
The effect of the explaining skills of the ITP in the circumstances of the client relationship. Moreover, the tax practitioners indeed devote most of their time in maintaining the papers for the clients to solve their issues related to tax and give them equal importance whether the issue is small or vast. The papers help the clients understand the concept of how tax is applied to things and what kind of risk is associated with it.
Role in tax consent
The role is based on comforting between taxpayers and the income authority. The responsibility of the tax practitioners has a strong impact on the taxpayer’s behavior and the reduction of administrative costs. The knowledge of the tax practitioner related to tax is far better than the taxpayers, that’s why the clients prefer to take advice from the practitioners.
The tax practitioners are a kind of gatekeeper of the taxpayers in the system of the tax. The major duty of the tax practitioners is to maintain the morals of the tax system and most tax practitioners help their clients to follow the rules determined by the tax system.
Consequences of the incorrect figures by ITP
However, if the tax practitioners make the calculation or figures related to the tax issue incorrect, gives a wrong knowledge related to the return of tax, the clients demand answers from the tax practitioners rather than demanding the answers from the taxpayers.
In this particular condition, the clients can take legal action against the IPT and they are not satisfied with the work. That’s why it is considered that the strict rules and the professionals that maintain the system led to the consequence of success in professional life. Therefore, it is said that professionalism comes with seriousness in the work, with appropriate knowledge, and fulfill the expectation of the clients.
Income tax practitioners are representative of the taxpayers that represent on behalf of them to the tax authority. There are few requirements to become a tax practitioner which are described earlier such as related to education, skills, registration, etc. to become a tax practitioner few duties are also associated with it that need to be fulfilled otherwise it causes a consequence. I dearly consider that you find this article helpful if you ever decide to become an income tax practitioner.