Income Tax: Do you need an expert to file your ITR? Pros and cons explained

Income Tax: Fewer than 40 days remain before the September 15 deadline to file the income tax return (ITR) for FY25. Some taxpayers could be busy arranging necessary documents as advised by their chartered accountant, whereas others would be doing it all on their own.

Those who opt for the DIY approach have their hands full – examining the documents i.e., Form-16 to 26AS, choosing the appropriate ITR form, selecting the right tax regime, evaluating total amount of deductions and computing the tax liability. But is it all feasible and advisable? Perhaps yes, if you have only one source of income and not too many nuances involved in your tax return.

Alternatively, you could engage an expert — a chartered accountant, and thereby outsource your responsibility to the one who knows tax provisions like the back of their hand.

When you have multiple sources of income

Experts recommend that taxpayers engage a chartered accountant when earning income from a myriad of sources. This helps ensure clarity and compliance and avoids mismatches between AIS and Form 26AS.

“A professional brings clarity, ensures compliance with the latest tax rules, and helps avoid mismatches with AIS or Form 26AS, which are becoming common triggers for scrutiny. Especially for anyone with multiple income sources, capital gains, or business income, expert guidance is essential,” says Kinjal Bhuta, Treasurer, Bombay Chartered Accountants Society (BCAS).

CA’s fee

Some taxpayers resist the idea of engaging a chartered accountant to avoid paying the fee. But the avoidance of inconvenience when an expert takes over is worth paying that fee for. When you pay ₹5,000 as a fee to the CA, it may look like an unreasonable sum, since you believe you could do it all by yourself. But if some anomaly creeps in — the penalty or fine would far outstrip this humble sum of ₹5,000. It is, therefore, recommended to let the expert do this job.

“If you are a shareholder, own foreign assets, invest in mutual funds, or are a director in a company, then it is recommended to engage a chartered accountant for ITR filing. Because one would not know what all should be disclosed in the tax return and more importantly – how. Taxpayers must understand that penalty for not disclosing foreign assets starts with ₹10 lakh. So, trying to save ₹5K-10K which a CA typically charges for filing an ITR may have drastic consequences,” says CA Chirag Chauhan, a Mumbai-based chartered accountant.

“Often the cost saving of not hiring a professional leads to huge tax litigation liability in future – straining the taxpayer’s time, money and efforts. Many taxpayers unknowingly make mistakes—like misreporting income, selecting the wrong ITR form, or missing out on eligible deductions,” Bhuta added.

Avoid tax department’s notices

Importantly, when you engage an expert, the chances of getting a tax notice would be minimal. After all, the Income Tax (I-T) Act is a piece of legislation which needs to be interpreted and inferred correctly, and CAs are trained in doing this.

“ITR filing is not just about filing information in a form. It’s about interpreting law, optimising tax and presenting correct information to avoid future litigation. For that, you should always consider an expert. Taxpayers should not be penny-wise, pound-foolish as spending money on compliance today helps to save big in future,” says Pratibha Goyal, a Delhi-based practising chartered accountant.

Future tax planning

Another argument experts make is that CAs tend to advise their clients about tax planning. “CAs know all the provisions and therefore, can advise taxpayers about how they can save their tax, going forward. If someone uses online tools, then customised tax planning may not be as effective,” says Deepak Kumar Agarwal, a Delhi-based chartered accountant.

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