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How to Start Your Own Income Tax Business?

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Income Tax can be a hectic and cumbersome process for many in India. However, it is pretty simple to start your own Income tax business as long as you have a few things clear from the very onset. Many Income Tax business owners find that their drive lies in helping others receive the most favourable tax outcome possible. This helps prevent surge charges, late fees, or any other commission to a third party. There are a few simple steps on how to start a business in India.

If you are an experienced tax professional or a rookie planning to assist others with the guarantee of a lower taxation amount, here are a few simple steps you can follow on how to start an Income Tax business:

1. State Registration for your Business

The first step in starting your own income tax business is to file for registration with your state. This is a relatively simple process wherein you are merely required to apply for a Business registration or a Limited Liability Company (LLC) registration that will enlist a permanent address and benefactor details for your business, making it official and hence credible. It is also called a ‘Doing Business As’ filing in a few states. This is the primary step on how to start a business.

2. Acquire your Goods and Services Tax Identification Number (GSTIN)

Any individual who may charge any fee for income tax return filing processes and preparation services must get hold of a Goods and Services Tax Identification Number. You can get your own GSTIN by registering online or with a state-mandated registrar. There are various UIDAI offices in major cities across the nation that can provide you with the GSTIN number for your business after verifying all the business documents.

3. Get all the necessary licenses and trademarks

Any business in India must get itself a trademark and ISO registration to prove its authenticity and make the business operations more credible for the public at large. It helps you protect your intellectual property rights so far as the business materials such as the name, logo, and branding materials are concerned. It also makes your business stand out in a crowd of thousands of similar companies.

4. Formulate a Plan to Execute before Launching:

Many businesses that depend intensively on business people and employed persons as their customers need to realise the erratic nature of the business environment at large. Hence, you must create a definite plan to acquire clients and maintain cordial relations with these clients in the long run for your business to remain sustainable and profitable in the long run. This plan is limited to organisational aspects and undertakes a strategy to execute streamlined and well-defined online and offline marketing campaigns to target new customers and clients and grow holistically. This is one of the best business ideas.

5. Use Marketing Campaigns Wisely

Try to balance offline and online marketing strategies to acquire new leads for clients and create a more loyal portfolio of clients for your income tax business. Make this process systematic and interactive. Most clients will approach your income tax business if they understand your transparent business processes. You can also use social media channels such as Twitter, LinkedIn, and Facebook to target entrepreneurs, small and medium-size business owners, and startup founders to cater to their income tax filing requirements to start a business in India.

6. Keep Yourself Updated with the Latest Income Tax Filing Dates and Guidelines

Although the process of filing for an income tax return seems complex to many, it is relatively simple if you are an experienced income tax agent. So, if you plan to start an income tax business that is successful in the long run, you must keep yourself updated with the government’s new guidelines and the dates for filing the income tax returns. It is your responsibility to ensure that your clients are meeting their deadlines towards filing income tax returns.

7. Connect with dignitaries in the Income Tax Tribunal

Suppose you are well connected with the Income Tax tribunal. In that case, you may be able to acquire insight into the future income tax filing change and acquire their assistance if any dispute arises with an income tax return filing for any of your clients. This helps reduce the legal weight on your shoulders as your business continues to remain purely a financial service provider with no political hassle.

In the world of taxation, income tax is the most debatable. There are hundreds of income tax-related cases that spring up monthly around the country. In this regard, should an unfortunate situation arise wherein a client’s income tax filing has been challenged or disputed by the respective governmental departments, your legal counsel can help prevent unnecessary legal expenses and save a lot of time and maintain the cordial relationship? This also helps in fostering better meaningful client relationships in this regard.

9. Lessen Your Business’s Fineprint

The fewer the fine prints for selecting your business, the more the chances are that your clients will choose you over your competitors. Keep the legal terms and conditions to a bare minimum and encapsulate all the information you wish to provide to the client in a manner that is readable and easy to understand, and concise. Make this portion clear and crisp and maintain a titled, systematic form to make this requisite portion more user-friendly.

10. Maintain Regular Interactions with Your Clients

Your clients are more likely to retain your services even after a couple of income tax filing periods if you are keeping in touch and communicating with your clients regularly. You can do so via email and SMS or even via telephonic conversations weekly as per their availability. This will remove any discrepancy that may be created between you and your client and help garner their confidence to collaborate with your business in the long run.

11. Allow a Variety of Payment Methods to Your Clients

Most clients look forward to a flexible payment method for income tax return filings. If you allow multiple payment methods to your clients, it is almost guaranteed that you will have more clients in the long run. Using online payment portals such as Razorpay and Paypal and the conventional IMPS, RTGS, and NEFT bank transfers can be a starting pedestal in this respect. You can also allow UPI payments and, in specialised cases, enable instalment payments to facilitate large sums to be paid more harmoniously. Nowadays, even Bitcoins and Ethereum can be used as a payment method if your business is well versed with such cryptocurrencies.

12. Maintain an Informative Online Presence that Creates Value

Customise your website to provide your visitors with adequate information about your income tax business and the process of filing an income tax return in general. Add value by stating what makes your business stand apart from the crowd and distinguish your online presence in this way. This will help you acquire more prospective clients directly from your website and social media pages. The more the clients learn, the more you benefit from them. This is the central idea behind this income tax business.

As stated before, income tax filing can be a challenging and long-drawn process for most people running a successful business. Hence, most of them outsource their income tax return filing processes to a third-party organisation or company. And, these third-party income tax businesses, for pennies on the dollar, provide you with a hassle-free income tax return filing process and make your business compliant with all the norms and regulations that exist today. Any home-based business in India needs these to work sustainably.

Also read:

1) What Happens to Indian's Tax Money after Payment?
2) Top-10 Highest Tax Paying States in India
3) Why Do We Pay Income Tax in India? Importance, Applicability & more
4) Types of Direct & Indirect Taxes in India
5) OkCredit: All you need to know about OkCredit & how it works.

FAQs

Q. Does an Income Tax Business have to be registered under the Government?

Ans. Yes, all businesses must be registered under a State Government to remain credible in the long run. This will also help you avoid legal hassles in the near future.

Q. Is it necessary to file for Income Tax returns myself for my own business?

Ans. No, you don’t need to file your income tax filing. You may choose to opt for an intermediary to save time and minimise your costs. This helps with regular filings and expedites the income tax filing processes.

Q. Is acquiring a GSTIN number necessary to start an income tax business?

Ans. Yes, in India, if you want to claim any government returns, you need to have a valid and active GSTIN number. This makes your business legal and brings it under the taxable ambit.

Ans. No, it is not always necessary to seek legal counsel to set up your income tax business. However, you may choose to employ an excellent legal representative to assist your clients with their legal issues when filing for income tax returns.

Q. What is the first step to start my own Income Tax business?

Ans. The first step to starting your own Income Tax business is to get your business registered under the State Government and acquire a permanent account number. You can also apply for a GSTIN number to save tax and prevent legal issues in the future.