The launch of the brand new revenue tax portal has introduced house the reality about how the tax division has made taxpayers depending on expertise in fulfilling their revenue tax obligations. The current web site was made non-functional from 1 June, and the brand new web site was launched on 7 June. While the web site grew to become accessible solely late within the night on 7 June, even until 15 June, logging in remained a problem, and even when one surmounted that, not one of the features labored.
Taxpayers eager to make overseas remittances couldn’t add the prerequisite types to make these. All such remittances had been held up from 1 to 14 June, until the federal government clarified that these types may very well be submitted manually to banks first, and uploaded on-line later. Meanwhile, taxpayers additionally obtained notices—these asking them to furnish particulars for evaluation which might in any other case be accomplished ex-parte; show-cause notices threatening levy of penalty until responded to; or notices warning of appeals being disposed of if submissions weren’t obtained in time. They had been left hapless and questioning how the federal government might threaten them with penalties for failure to conform, whereas compliance was not possible.
This has been the unlucky story of taxpayers in relation to tax compliance up to now as effectively. Compliances are elevated with out regard to the difficulties taxpayers face. The price range amends tax legal guidelines yearly with new provisions to punish taxpayers disproportionate to the offence dedicated.
Honest taxpayers are sometimes penalized for small offences. A tax deductor could make 1000’s of tax deductions accurately, pay tax in time, file tax deduction returns in time and generate tax deduction certificates. But if he forgets to make one tax deduction, he’s penalized by having the expenditure disallowed, leading to his having to pay revenue tax greater than the tax deduction concerned, in addition to having to pay curiosity and penalty for non-deduction.
Taxpayers are penalized by not permitting carry ahead of losses in the event that they file their tax returns even someday late, and even when such delay could also be resulting from unlucky circumstances akin to a severe sickness. Charitable trusts are worse off—they lose their tax exemption for the yr in the event that they file tax returns late even by a day. Late cost of provident fund dues by a day (even when the PF web site is down) may end up in big revenue tax liabilities. There are quite a few different such provisions, that are completely unjust.
Can such compliance be a one-way site visitors, with 100% compliance anticipated from taxpayers, however no reciprocation from tax authorities? Is there no such factor as accountability for the tax division? During covid occasions, many taxpayers had been upset that tax officers got far more time to finish assessments (15 months), than what taxpayers got to file tax returns (lower than 6 months). Was the impression of the lockdown and the pandemic lesser on common taxpayers than tax gatherers?
In truth, reasonably than the tax division being supportive and assuring taxpayers that they won’t endure due to this non-functional portal, one sees a blame recreation happening between the tax division and the software program developer for the whole failure of the brand new portal. The compliance burden has not been eased.
Taxpayers positively respect how computerization has accelerated the method of tax refunds, and eradicated a big a part of the discretion that tax officers used as leverage over taxpayers. But they definitely don’t respect being check customers for software program that’s not totally purposeful, leading to wastage of time on rectification functions, appeals, or determining learn how to file return types that don’t totally and accurately replicate the authorized place, or just learn how to get credit score for taxes that seem on-line however don’t seem of their tax assessments (even nearly 20 years after this was computerized). Can amended return types, new software program, new portals, and so on. bear thorough and rigorous testing for numerous conditions, earlier than being launched on hapless taxpayers?
We boast of a few of the world’s finest software program corporations. If even these corporations are usually not capable of obtain the specified outcomes, one thing is certainly flawed. Is it the specs, the testing methodology, the way during which implementation is rushed or just the extraordinarily sophisticated tax regulation provisions which have resulted in such failures? The tax division positively must introspect, and handle the basis of the issue. It is simply then that taxpayers and tax gatherers will each be proud of the outcomes.
Gautam Nayak is associate, CNK and Associates LLP.
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