Sunday, 24 April 2011

Taxing Times

The season for tax returns is just over in the US. Its just beginning in India. Appropriate time to rave and rant on the nonsensically complex process of making out a tax return. No, I am not a tea party activist (I drink coffee and in any case, I wouldn't be seen dead with that rabble). I am just venting steam ahead of having to sit down and do the damned thing. Thankfully I only have to do an Indian tax return, but that is torture enough.

Everybody knows that the famed Ramamritham absolutely loves Income Tax. Great opportunity for framing fiendish rules and impossibly complicated forms to fill. Just consider the following evidence.

The first problem is to decide what form to fill. There are no less than 8 different forms you can fill. It all depends on whether you are a HUF or a BOI or a AOP. What if you can't figure out what those are and if you figure you are just a human being ??? Not sure - In Ramamritham's lexicon, normal human beings don't exist. 

With delicious irony, he has designed a from called Saral for dullheads like you and me (OK OK, just me). Saral in Hindi means easy.  Never mind that the form appears to be intelligible only to a rocket scientist. When somebody pointed out this irony to him, he promptly renamed it Sahaj, which is just a complicated form of the same thing - simple !!

Of course the normal calendar  is just too "saral". So came the innovation of April to March. For that we have to thank Sir Humphrey Appleby, forerunner and idol to Ramamritham. Something as simple as a calendar year is of course anathema to these venerable gentlemen.

He expects you to fill the return for something called "the previous year to the assessment year". So the assessment year is supposed to be the next year into the future so that you can file the return for the previous year !! I am now supposed to file the return for assessment year 2011-12, declaring income for the previous year 2010-11, corresponding to my financial year which is also 2010-11. Whoever dreamed of this concept deserves the highest accolade of Ramamrithamology.

As for the Form itself, I defy any sane human being (Chartered Accountants are not classified as sane! ) to be able to fill even one item. Other than the question, are you male or female, that is. Take this one for example.

"Long- term capital gain where proviso under section 112(1) is applicable (Without Indexation)-Code in SI Schedule is 22, Tax Rate is 10% ;Enter only positive value from Item B4c of Schedule CG AFTER loss adjustment under this category in Schedule CYLA and BFLA, if any. "

One of the fundamental principles of any legal system anywhere in the world is Ignorantia juris non excusat (Ignorance of law is no excuse). Somebody should file a case saying this principle has been breached by the Indian tax law - surely human brains haven't evolved to the point where they can begin to understand the Income Tax Form.


gils said...

tax - charge against a citizen's person or property for the support of government.

Me shifting to naxalbaari...salarya vida tax neria pudikaraanga :( payroll dept kita en tax n salarya swap panni kaasu kudungadaanna kekka maatengaranga :(

JK said...

To file a tax return is really a headache

raghavendra kotla said...

Objection your honour...your statement on chartered accountants :-)

Anonymous said...

Oh yeah! The most dreaded time of the year. I HATE to do it.

Ramesh said...

@Gils - Naxalbaari haftas are worse than taxes. Better to stay in Chennai and moan about it :)

@JK - That's why there's no need for you to file one !

@Kotla - I was waiting to see the first CA to object :) Readers of this blog from that esteemed profession are taken in to humankind as ex officio members !! :)

@Hema - Pity you can't escape it, being a hot shot executive :)

Chennai Vibes said...

It is a nexus between the Chartered Accountants and Income Tax Department.If calculating tax and filling out tax forms were simple for normal human beings like us, then who would pay CA's for calculating and submitting tax forms.

RamMmm said...

To add to "IT law-2008, Chapter 2, Section 2.5, subsection 8, clause 3, sub-clause 14, interpretation 4". Those who make fun of the honorific IT system (or is it I 'scape'em) will have their returns of the assessment year 2011-12 subject to special scrutiny and will be made to run pillar to post between the ACIT of their respective ward and the labyrinthine locations at where the returns are acknowledged.

Ramesh said...

@Chennai Vibes - Not so loud. The many CAs who come to this forum might bash you up !!!

@RamMmm - Real danger of that happening. I am ducking for cover !

Sandhya Sriram said...

As per 5th proviso to Section 2 sub section 5 clause (iv) of the Chartered accountants remuneration safeguard Act 1950, you are accused to have committed the following offence

"Creating or Tantamounting to Create a sense of consciousness among esteemed audience of this blog about the "so called" complexity of a piece of legislature which may directly or indirectly result in a feedback to the "Esteemed Mr. Ramarathinam" to an attempt to simplify a piece of law which is extremely vital and essential to the very existence of the fraternity.

Under the authority conferred on the undersigned by the aforesaid Act under 233rd proviso to Section 219954 - you are being subject to the following penalties

(a) You have to say "Hail Ramarathinam" 10 times jumping on one leg and post a picture of that on this website

(b) You have to promise to post the next 10 blogs within the next 10 days

(c) You have to take the undersigned out for a cosy dinner

Further penalties as slated out by the Act are being waived out considering the fact that (c) above will definitely be honoured.

Vishal said...

Well, you can't really separate CAs and insanity. It instills a sense of comfort when you hit it off for the first time with easy debits and credits and then drives you nuts when you are supposed to understand 23366 sections of some 539 acts with equal numbers of provisions of AAS, IAS, IFRS and what not.

As long as normal human beings refrain from understanding what LTCG means, it is good for us. Well not really the ones like me but for the ones who work day-in day-out filling those returns for a nominal sum of money ;) Isn't it nominal??? ;) Poor partners and poor articles! :)

Ramesh said...

@Sandhya - ha ha - a classic riposte. I should have known better than to needle a gold medallist.

Of the three penalties, one is the easiest and the most pleasurable. Will contact you directly ! No prizes for guessing which one !

@Vishal - "Poor" partners ??? That's an unthinkable concept :)

kiwibloke said...

Perfect timing almost to the date. In NZ around the 24th of April is called the liberation from Tax day.If you look at it, Apr 24th is roughly 31% of 365 days and 31% is the average rate of tax. So from Jan 1 to Apr 24 you work and earn for Ramamritham. Rest of the year is earnings for you to keep. (No I'm not a Chartered to get into this convoluted logic chopping)

J said...

At the risk of running afoul of The Chartered Accountants Remuneration Safeguard Act 1950, "Turbo Tax zindabad!"

Ramesh said...

@kiwi - Put it that way, it looks like daylight robbery, isn't it.

@J - Amen !!

Deepa said...

I would have joined the gang in this Indian tax return bashing. But ever since I have dug my head in the US taxes, 'saral' looks like a love letter to me! :) The craziest tax provisions, the most outrageous classification of induvisuals (based on your marital status). I wonder in this land of law suits no one filed a PIL for being penalized for being 'married and filing a tax separately! In India u have to fill out just one form, but out here, if you travelled the way u do, and just visited some other state for 2 days, u would file a tax there. So on average everyone files 1 fed and a couple of state taxes. Fancy that! Oh yeah, the states aren't consistent with there tax laws here.

Ramesh said...

@Deepa - I have heard of the incredible nuttiness of US tax returns. Thankfully, I have never had to do it. Can only sympathise with you.

K.Venkataraman said...

Long time back, since I went BPL (Below Poverty Line) I have not bothered to get any Saral form to file my IT returns. This year our Hon. Finance Minister has given one more concession to people like me Very Senior Citizens, 80 and above. But what use is this me for me during the 10th wicket partnership of the innings? As a law abiding citizen who has filed his IT returns and paid all the taxes dutifully will the Hon. FM consider giving back some of the exorbitant taxes collected during the past? This will be a good gesture to the Very Senior Citizens during the last days of their life before being called by the Good Lord.

Ramesh said...

@KV - Welcome to this space. Honoured. I personally think the very senior citizens should be fully exempt - they have contributed to the nation enough and its now up to us youngsters to take care of them. Considering that the PM, the Finance Minister are all in this category, there may be some hope for such exemption !

zeno said...

Hmm Interesting every one worries only about submitting Tax returns, but nothing about paying the tax in the first place?!! Too bad.

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