This is the first time you are going to sit for the Tax Return Preparer (TRP) exam. As there is no past exam question, so you have no idea what will be the question in the exam. In this case, what can a candidate do for TRP exam preparation?
You may know the National Board of Revenue (NBR) has already published a guide for TRP exam preparation. If you see it, you will notice, all of the content is related to the tax return preparation for an individual taxpayer.
There is a rule published by the NBR regarding what will be the areas of service for the TRP in which it is mentioned that a TRP will be responsible to prepare the tax return of new individual taxpayers. Except for individual taxpayers, a TRP will not prepare other taxpayers return like company taxpayers.
As the TRP will prepare only the individual taxpayers returns so he shall know everything about the tax calculation, tax return form fill-up and tax return filing. And you will notice these areas related to individual taxpayers in the exam guide issued by the NBR.
Hope, you are clear about the areas for the TRP exam preparation.
But the question is, whether the exam will be short questions answers or Multiple Choice Questions (MCQ)? Whether a TRP candidate shall have to answer any tax calculations in the exam. Will I have to answer any math related with individual taxpayers tax related issues?
I know, these types of questions are appearing in your mind. Because you want to know what the questions type and then based on that you will start to take TRP exam preparation.
But I will suggest it to you, as this is the first time you are going to sit for the TRP exam so it will be better to read first to last of the exam guide published by the NBR. If you read this guide then you will get an overview about the exam which will make you confident about the areas of the TRP exam.
When you complete the guide issued by the NBR, then you can increase your level of preparation by studying the supplementary books available in the market. Before buying any books from the market, know about the author which is very important.
A quality book will guide you to take better preparation for the TRP exam. The page number and the discount of the book will not ensure the quality of the book. So, know about the author and the content before buying a book from the market.
You can divide the learning into three steps. First, general understanding about individual taxpayers return filing; second, tax calculation of individual taxpayers and third, tax return forms for individual taxpayers.
Let’s discuss these three steps one by one!
General understanding about tax filing by individual taxpayers
There is a long list in the Income Tax Act which requires you to obtain a Tax Identification Number (TIN) but all of them do not require you to submit a tax return to the tax circle. And also, those who are filing tax returns are not required to pay tax.
So, first you have to know who is required to submit a tax return and who is required to pay tax with return. What is the tax free threshold and what will be the legal consequences due to failure of the tax return within prescribed time.
If any additional tax is paid during the current year or prior year then how to adjust the excess tax and you shall know about minimum tax for individual taxpayers because all of these will affect individual taxpayers tax calculations.
Tax calculations of an individual taxpayers
Tax calculations start with the income of the taxpayers. A taxpayer shall accumulate the income from all sources. According to Income Tax Act 2023, there are a total seven sources of income but in the tax return of individual taxpayers, there are ten income areas. So, you have to know which incomes are taxable and tax free. All of the taxable income shall be accumulated to find out the total taxable income.
When you calculate taxable income to know the tax amount then you have to deduct the allowable items from income of the taxpayers. You have to know where the allowable expenses are mentioned in the tax law to consider the exact amount for deduction.
Investment allowance and tax rebate amount is very important to get the tax credit by the taxpayers to reduce the tax liability. All these issues you have to know to determine the tax liability.
Tax return form for individual taxpayers
There are two return forms issued by the NBR for individual taxpayers which are available on the NBR website. You can easily download these forms from the website.
IT GHA (2023) is applicable for the taxpayers who have income upto BDT 500,000. There are also other conditions for this tax return form. If these conditions are met then this tax return form is applicable for him.
But IT 11GA (2023) is applicable for all individual taxpayers and this return form is long which is divided with several schedules and statements. All of the schedules and statements are not applicable for all of the taxpayers. So, you have to know which schedules and statements are applicable for a particular taxpayer.
To get ready for the TRP exam preparation, expand your learning as discussed above. And again I will go back to the guide published by the NBR and then buy quality books from the market. Try to continue studying on a regular basis which will help you to succeed in the TRP exam.
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