Sunday, May 03, 2015

IT Return: Form over Function

| Mumbai | May 02, 2015 11:06 IST
Notwithstanding the finance minister’s abrupt guarantee of an ‘extremely simple’ income tax return form, ease of filling forms yet remains a distant dream in the country. Ease of doing business is a utopian hallucination in comparison.

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Form filling has always been a grueling proposition in India. By a queer mix of default and design, it is always engineered to become a torturous experience. In the case of income tax returns, the torment becomes a return gift to the tax payer for only doing his or her national duty. On the one hand, the government frets over poor tax collections; on the other it makes the very process of collection even poorer. Thanks to bureaucracy’s glorious obsession with humungous amounts of data, all kinds of forms end up defeating the very functions they seek to serve. As a result, ‘Saral’ becomes as difficult as possible and the notion of vigilance invariably translates into a nuisance of intrusion. And even after the back-breaking rigor, India’s tax system leaves a lot to be desired.

Before it seeks to cause more information deluge, the government should find out what’s it doing with the tons and tons of information it has gathered over the years? And what stops the tax authorities from making the most of the wealth of information provided by the Annual Information Return? Agreed, the Central Board of Direct Taxes (CBDT) has rightly relieved individual tax payers from the AIR burden but how far has it used the AIR stuff to make smart, selective scrutiny of defaults and irregularities?

No wonder, the ache of several years culminated into a resounding groan when the CBDT announced a horrific 14-pager for the assessment year 2015-16. Just when e-filing otherwise sought to end the annual nightmare of last-minute filings, the additional mandate dropped a fresh bombshell, seeking detailed information on the taxpayer’s foreign travel among other disclosures like comprehensive details of bank accounts held which the PAN card can easily reveal in good time.

Quite obviously, one underlying purpose of the new mandate was to check the growing black money menace but rather than proactively ensuring the tax return filing of people who went on trips abroad, the onus of sharing details is on the tax payer who’s already grappling with the gory diktats of an elusive return form, albeit in different forms. Call it Saral or Sahaj, the burden has seamlessly traveled over time. If for one year, the tax payer struggled with intricate mentions of foreign assets, another year called for mind-numbing details of capital gains, not to mention the jumble of allowance disclosures for the salaried class every year.

Just when will CBDT envisage the grass root impact of its roof top mandates? For instance, how does it expect regular travelers – both employed and entrepreneurs - to furnish granular details of their travel transactions? And imagine the predicament of expats coming home for a happy sojourn. Are they expected to keep a exhaustive record of every expense they incur on home soil?

Probably sensing the gravity of the backlash in the public domain, the Finance Minister made an adhoc clarification (read crisis communication) in the midst of his Washington tour, reassuring us of an ‘extremely simple’ form in the making. Before we speculate on what’s extreme or simplistic about that statement, we wonder why India was left waiting for a hotline intervention if the option of making form filling ‘extremely simple’ was always at hand. Yet, shedding our dangerous cynicism aside, we hope and pray that the new form will make life somewhat easier for tax payers, more so for those who diligently make their earnest contribution, year after year, to India’s Growth story. Brand it as PM Modi’s Make in India vision or call it RBI Guv Rajan’s Make for India mission, the contribution is priceless.