Tax-payer friendly? India still has a long way to go!

Finance Minister Jaitley has often said that he wishes the tax departments to be taxpayer-friendly. He has ensured that the departments have issued internal circulars and scheduled open houses to make this happen. I believe he is sincere in his intention, but how easy is it to change the mindset of a massive bureaucracy? I narrate below the inquisition I have been though these last few months at the hands of many tax officials.

First, my mistake – My big mistake was that in the year 2013-14 my wife and I sold some shares of a company we had founded 20 years ago. As our original cost was par, the profits stood out in relation to my normal historical income trends. We dutifully paid the advance tax, final tax, filed the returns etc. all well in time. As normal professionals, we were anyway quite jittery at the prospect of the forthcoming firestorm of inquisition, and so, we took extra care to pay our dues ahead of time.

Late last year the inquisition started. First, the Income Tax department asked us that in view of revived business environment we should have paid even higher taxes this year, and threatened us with an arbitrary demand, imprisonment etc. for not paying a higher amount of advance tax for the current year. This, after the return was filed clearly documenting the once-in-a-lifetime nature of the previous year’s capital gain.

The service tax department, not to be outdone, got into the act. The regular assessing officer wanted to know why this year’s taxes were lower; he wanted five years history of income, expenses, balance sheets, bank statements and more such.

While we were responding to this enquiry, the Audit wing of the same Service Tax department woke up and asked for identical set of information. And while we were responding to both these enquiries, an Assistant Commissioner from the Intelligence Wing sent a notice stating that “It has come to his attention that we are concealing income” and he would like pretty much the same information as the others. Before we could respond to that, a separate letter comes from his Superintendent (an officer presumably reporting to him) asking for the same information under some other section. And I as am writing this article, ANOTHER letter from another official from the same office asking for the SAME information!!! The saga will never end.

Now, here is the bit that is mind boggling. It is one Service Tax department, and we have been issued unique IDs. Why do four different officers ask for the same information without realizing someone else is doing the same? Is there excess employment in the department? Do they not use the computers as they are meant to be used?

Secondly, why do these letters have to be so antagonistically worded? If any normal person had started by calling me a criminal I would have probably slapped him in the face. But we citizens have to take this sort of language and tolerate it. Left to me I would have written a strong letter back, but my consultant (who has to make a living from this) begged me to write a polite letter back. I wonder how these officers would like it if we commenced our responses by accusing them of incompetence or bribery.

More than the incompetence and lack of process, the sheer discourtesy and antagonistic process gets my goat. Do they not realise that my taxes pay their salaries? And do they not see the massive tax evasion going on all around that they have to focus on middle class professional taxpayers?

Finance Minister Jaitley has good intentions, but he has his work cut out for him.


About the author: This article has been written by V Shankar, Founder of Computer Age Management Services.

(PS: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, Business Insider India.)

(Image: Reuters)