Friday, 1 August 2008

Thank God I Filed (TGIF) my tax returns

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Thank God I Filed (TGIF) my tax returns before 31st July 2008. I am an ordinary salaried income tax payer who can never escape the clutches of the taxman. Even a hundred rupee increase in my salary is correctly accounted and appropriate deduction is made. I abhor paying a penalty because I did not fill a form that contained details of my income.

Out of curiosity, I tried to find out how many people in India file their returns and believe me or not, it is only 30 million who file their tax returns and 20 million of them are hapless salaried employees like me. The forms to file the tax returns are called SARAL and after nearly a decade of filing tax returns, I am wondering whether the meaning of SARAL as understood by me is correct or not.

I don’t want to delve too much into the divine intentions behind insisting on a tax return to be filed by a salaried employee except that you can further tax him for small capital gains and FD interest he/she earns. Salaried employees are the easily available flogging horses, so put in a penalty clause if they don’t file their returns by a certain date. It is such an innovative method to earn additional tax revenue.

I wonder what would happen if for a year or two, the tax department gives a “tax returns holiday” and goes beyond those who are at large and not paying taxes. It anguishing to note that even farmers who cultivate strawberries are exempt from income tax. Taxes should be collected from farmers who grow cash crops. I don’t think any of the small grocers pay income taxes nor do the vegetable mandiwalas neither the building contractors nor the small hoteliers nor the taxi owners. If at all they do pay, it would only be a token amount to keep away from the eyes of the taxman.

To say that there are only 3 crores people in India with a taxable income is the most absurd statistic. If that was true, how come the parallel economy is bigger than the national economy? How did the talks of bribery reach a crescendo during the current trust vote? Why is there so much benami property in the country? Why does not the IT Department instead of worrying about mundane tax returns concentrate its efforts on mapping each property in the country to its owner and demand for source of income to buy that property? Why does not the IT Department go to the streets and find out the real income tax offenders?

It is very easy to make the hapless salaried class pay through their nose and drain them till the last pie but that would never result in a transparent and efficient tax system. It is a shame that even after 60 years of Independence we are not able to do away with black money. The salaried person is pre-occupied with many issues on hand. Most of them have an extracting 9 to 6 job on his hand. He has to pay extra for the loans due to increasing interest rates because nobody will write off his loans or compensate his family if he commits suicide unable to bear the burden. He is sufficiently squeezed don’t wriggle him more. If you want an exact picture of the tax potential of this country, dear, taxman, get out of the comforts of your office and into the streets, you will find an Alibaba cave every nook and corner of this country. Not filling a tax return on time is not a crime neither on the financial or physical security of the nation.

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