A couple of years ago, we had published an article that essentially reproducted an email sent to us by valued reader Mr. N J Patel that highlighted certain systemic flaws in the income tax paying and filing process. Several of these issues are chronic problems that taxpayers have been enduring over the years but unfortunately the authorities have so far chosen to turn a blind eye to the problem.
Mr. Patel’s email appears below in quotes.
“You had appreciated a tale of tax payers’ woes which I related to you a few years ago and thereafter have at least twice to my awareness published these in your columns with gracious acknowledgement of their origin. Sadly hardly any of the difficulties which were listed as obstructing willing tax payers have as yet been rectified. I now mention some more hindrances which I have encountered:
Although in theory we are entitled to submit Returns any time after 2nd of April of each year and you often urge your readers to do so, the income tax department introduces increasing hindrances to our doing so. One is that the Return Forms are changed in most years and updated ones are not revealed often until around end June. Tax deducting organizations are allowed to certify TDS as late as end May and in many cases neither do Forms 16A reach assessees nor are the relevant Forms 26AS updated until well into June, sometimes even into July – yet Tax Returns from taxpayers are not accepted without details from these being inserted.
A striking example was when Forms in Excel format for A.Y. 2014-15 inexplicably could not be verified or converted into .XML format, until by sheer chance I discovered that the Forms for that year had been issued through the 2013 version and would not respond to older versions.
This was done without any warning in the Instructions saying so. It meant that submitters had perforce to update their systems at significant and otherwise needless cost to themselves, which of course the income tax department blithely disallowed as a deduction from tax payable.
My personal income etc details will be compiled by end April. However, I expect that I shall not be able to submit my Return then because Forms for AY 2016-17 will not have been issued, all Forms 16A not received and all tax deduction details will not have been entered in Form 26AS. All these requirements are likely to be met only by early July, as happened last year. However I shall be away from India from late June and will return only in mid August, so will not be able to submit my fully completed Return by 31st July, for no fault of mine. I do not have anyone to perform this task for me either. Is there any option I can use ultimately to submit a fully accurate Return yet not be held to have transgressed the last submission date – I have carried over losses from previous years which I require to remain admissible.”
Mr. Patel’s astute observations succinctly capture and summarize the collective angst that the community of individual taxpayers feels against these systemic inefficiencies.
If you think about it, the solution is simple – almost too simple. First, put up the new return filing forms (if required to include any amendment – else the same forms that were used for the previous year could be used) as soon as the financial year draws to a close. Secondly, make in mandatory for interest (and other income) paying organizations (whether banks or any other) to issue Form 16 by a particular date – say end April or 15th of May or some such.
Similar process to be followed in the case of Form 26AS. These three steps if taken expeditiously will go a long way in addressing the anguish of genuine taxpayers and also simultaneously assuring that the government gets a fair part of its tax revenue in a timely manner.
In short – what Mr. Patel has been suggesting (for many years now) is nothing but a WIN-WIN for all parties concerned. But is anyone listening?
(The authors may be contacted at firstname.lastname@example.org)