My Personal Experience With Our Extremely Efficient Indian
Income Tax System
Shrikant G. Talageri
I am writing this article out of pure frustration, because my fingers are itching to have this on record, and because as a writer in a country with a hyper-bureaucratic and hyper-inefficient system there is nothing more that I can do beyond placing this on record.
I am a purely middle-class person, a mere “bank employee” as critics of my books have chosen to label me when no more concrete and factual criticism was available. My only income all my life was from my bank salary, and now from my pension and my perfectly legitimate savings bank account and my mutual fund SWPs. I have never had other notable sources of income. More pertinently, although tax saving facilities and schemes were always available, and very commonly made use of by salaried people (and also I suppose non-salaried people), I never made use of them simply because ( due to my careless and lazy attitude) I found it tiresome to keep track of them. So I always paid my full income tax as per the rules and never made use of these tax saving facilities (other than those, such as standard deduction, etc., which automatically get applied).
One would think that in a country where extremely corrupt and even criminal elements get away with all kinds of financial shenanigans and massive tax-evasion activities, this would lead to a problem-free life at least in matters of income tax problems.
But then, this is India. I have already written an article about India’s coinage system. This article is about the efficiency of our highly advanced and sophisticated income tax system.
As I said, my full income tax throughout my working life was always directly cut from my monthly salary throughout the year. So here is my dukh-bhari dastan:
1. In the year 2011-2012 (Assessment Year 2012-2013), I worked for 7 months (April-October 2011) in Central Bank of India, Naigaum branch, and was then transferred to Central Bank of India, Mumbai Main Office for the months of November 2011-March 2012.
2. TDS was deducted from my monthly salary and paid to the Income Tax department for all the twelve months:
21080/- April-October 2011 through the TAN No. of our Naigaum branch.
14509/- November 2011-March 2012 through the TAN No. of our Mumbai Main office.
3. However, for some reason, the sum of 21080/- paid through TAN No. MUMC11425B was not taken into account in my TDS by the Income Tax department, and I received a demand notice for 21080/-.
I replied to the Demand notice on 25 June 2013, attaching my copies of my ITR-V acknowledgement and my form 16 for the AY 2012-2013.
As the IT-filing process was manual and not computerized, I submitted all these documents manually to the Income-Tax counter at Bandra-Kurla complex. My reply was acknowledged, accepted, and the matter was therefore closed. In the year 2013 itself.
However, after computerization of the IT-filing procedure, I again received the same Demand notice for AY 2012-2013 six years later in the year 2019, proposing to adjust the amount of 21080/- against my refund amount of 37,256/- for the AY 2019-2020.
After I submitted my response to this Demand Notice, my response was accepted by the Income tax department, vide a "Communication for Issue of Refund Without Adjustment of Demand" dated 15 August 2019.
The communication clearly said:
"On careful consideration of your response and material
available on record, the refund amount issued to the taxpayer for the AY 2019-20
is calculated as under:
Refund amount as per order dated: 37256
Adjustments if any: Nil
Balance Refund Issued: 37256."
So my response to the Demand Notice was officially accepted and the Demand for 21080/- was officially accepted as closed for the second time in 2019.
But apparently it was not closed!
Four years later, in 2023 (five years after my retirement and ten years after the first Demand notice) I again received a Demand Notice for the same amount of 21080/- dated 5 September 2023, telling me that my refund of 14503/- for the AY 2023-24 is proposed to be adjusted against the old "Outstanding Demand" of 21080/- for the AY 2012-13.
This time (due to the extremely complicated nature of the newly computerized/digitized/whatever nature of Income Tax activities), I had to do a lot of running around and taking the help of various people to send my response to this repeatedly repeated demand for Income Tax that I had already paid in full ten years earlier.
Finally, my response was officially accepted and the Demand for 21080/- was officially accepted as closed for the third time in 2019.
It is now 2026, and I filed my income tax returns for the assessment year 2026-2027 on 20 July 2026.
And yesterday, 9 September 2026, I received two notices from the Income Tax department. The first notice told me that I was due for an income tax refund of 80130/- or 81330/-. [This was, I must admit, because I wrongly calculated my income tax due while filing my income tax on 19th July and paid high income tax on a wrong amount, and after I realized my mistake the next day I filed a revised Income Tax which made me eligible for a refund of 80130/-].
The second notice: again that same old Demand Notice of 2013 along with the intimation that my refund will be adjusted “against an outstanding demand”: the original 21080/-, although it does not say if it will be enhanced by adding “interest” etc.
In matters of intellectual dispute I never give up. But in the face of a bureaucratic hegemon which can continue to demand payment of an income tax amount already paid 13 years ago in 2013, and even after repeatedly (in 2013, 2019 and 2023) accepting that the demand was incorrect and unwarranted, I give up. There is no need to spoil my health by doing any more running around trying to again settle a matter already settled three times in the last 13 years. I will let the Income Tax department again collect from me an amount already paid 13 years ago.
Apparently, if I do not reply within 21 days, the amount will be deducted from my refund. So be it. I have done charity countless times in my life. One more time will not kill me.
The only thing I am wondering is whether, after having the (whatever) amount deducted from my refund sometime soon, will I continue in future years to repeatedly receive the same Demand Notice again and again once every few years (as long as I am alive) and have to repeatedly pay 21080/-, with or without interest every time?
Having put this down in writing on record, and done my patriotic duty, I will attempt to forget the whole thing for the next few years at least.
It is a myth that India is the world largest democracy. The fact is India is one of the world largest slave camp, being run by gangster politicians, oppressive and heartless bureaucracy and supported by licensed rowdies designated as ‘police’. The ruling dacoits in the guise of politicians have firmly rooted in power and paved way for their sons and daughters to succeed them with the active connivance of the corrupt bureaucracy. Remember this is the same bureaucracy and police which earlier carried the orders of the British before 1947. Sardar Vallabhai Patel, the first Home Minister of Independent India (Independence for crooks to carry their activities with impunity) instead of dismantling the bureaucracy and police which worked as mercenaries for the British retained it. For the common people of India it was just the change of masters, the brown replacing the white.
ReplyDeleteOnly an insider know the state of affairs in India, worst form of oppression, exploitation and abuse of power by the politician/bureaucracy nexus who have made the commoners impotent. The outside world has a rosy picture of India with its so called free press, holding of elections regularly, growing economy, etc. But the truth regarding free press is that only the English media is somewhat free as its readership is microscopic, mainly elite and the English speaking middle class. While the former has benefited by the ‘System’ the latter is least bothered about the state of affairs in the country. Their only aim is to get good technical education, if possible fly abroad to a western country or get a job in an MNC. Moreover this class even though aware of the filth in the ‘System’ is not ready for big sacrifices required for fighting the ruling mafia. In case of vernacular press, reporting any scams or questioning the acts of politicians, results in the latter sending their goons to silence the former. The law called ‘Right to Information Act’ (RTI) is of no use as the rowdy politicians don’t care even when all the irregularities committed by them are published by newspapers. The politicians attitude is like this—‘you publish, people read, then what’? They know that people are not going to raise their fingers against them. After all this is India, not France, Russia or America.
One unique feature of Indian rowdycracy is that anyone can join the ‘System’. If you are a habitual liar, thick skinned, shameless, has the capacity to maintain thugs and doesn’t hesitate to take lives then the job of politician is for you. But if you insensitive, heartless, but want some quick bucks, but not ready to take risk, then you can join the bureaucracy. Apart from steady income with pension you will be accountable to none and have all the privileges of being a part of the ‘System’. If you are a sadist, psychopath, having urge to rape, assault and torment people without the fear of being punished, then join the police department, for not only you can fulfill your lust but also get regular salary, pension and bribes. While in other countries children feel safe in the presence of a policeman, in India the mere mention of his name will make children to defecate. Women especially uneducated and from rural area avoid visiting police station to file complaints for the fear of being raped. Filing false cases, collecting protection money from petty street vendors, business establishments and a share in looted goods are some of the work one is supposed to do in this department. In return for this freedom and license to kill and loot people they are supposed to guard the politicians and suppress any voice of dissidence by the people fighting against injustice. If at all the politicians and bureaucracy in India are having a field day it is mainly due to the protection given by the police to them. They had done the same job while the British were ruling India.