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View | With common ITR form, the taxman should not rock the boat

View | With common ITR form, the taxman should not rock the boat

View | With common ITR form, the taxman should not rock the boat
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By S Murlidharan  Nov 7, 2022 6:57:49 AM IST (Updated)

"Why should a salaried person with no other income save interest from savings bank account be pummeled with so many wizard questions?" writes S Murlidharan.

In the name of simplification, the Central Board of Direct Taxes (CBDT) with the newly proposed common income tax return form is actually introducing unnecessary complications into the return filing process. Experts are asking why rock the boat if the existing system is working reasonably well.

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The CBDT released the draft common income-tax return form on November 1 seeking public opinion and comments thereon by December 15, so that they can be incorporated where appropriate before finalising the draft. The brainwave for this initiative has come from international best practices though cynics say it has evidently come from the government’s desire to view the nation as a monolith — one nation one tax (GST), one nation one ration card (proposal to allow one to draw his ration from anywhere in India), and so on. But without getting into the polemics of the issue, let us examine the proposal on its merits.
The extant ITR 1 (Sahaj) the so-called default form available for the salaried class with income of not more than Rs 50 lakh would continue to be available. In other words, despite the common form, an assessee can continue to file under ITR 1 if he wants and is otherwise eligible. The same is true for ITR 4 (Sugam), which is meant for small retailers availing the presumptive taxation scheme.
While these two are cases where one has the option, the common form is out of reach for trusts. They will have to file return in Form 7 as hitherto. So far so good.
There are many imponderables though. The elephants in the room are the wizard questions, the ones at the start and heart of quizzing in a particular situation. If the answer to the wizard question is in the negative, not only further questions flowing out of an affirmative answer will not be asked but more mercifully they would be banished, meaning they will not roll out on your online return like for example details of Section 80C deductions when one hasn’t availed of it in the first place. Thus, if you haven’t given any donations qualifying for deduction from gross total income under Section 80G, the minutiae thereof will not be asked, and, in fact, not appear at all on your computer screen.
But that brings the question: Is the common man equipped to answer all the wizard questions one way or the other? While he may answer the question on donations, he may be flummoxed by the question on business connection, virtual assets and income of other persons in his hands. Whether you are eligible to exemption under Section 10AA might make him wonder what it is all about and make him feel guilty about his ignorance.
Whether you have any business connection is a leading question to a non-resident. He would not like to stick his neck out. In short, the wizard questions assume a certain amount of mastery of the income tax law on the part of the assessee. That may not be true often.
Thus, the common form may prove to be regressive in that it may call for expert services even for the common man when all along the claim has been the return filing process has been so much simplified that one can file his return oneself. In other words, the common return may be a case of losing in the swings earned in the roundabout — sparing the burden of going through unnecessary schedules may be neutralized by the rigor of answering wizard questions.
The point is that in the name of simplification, we should not be actually introducing complications into the return filing process. The existing system is working reasonably well. Why rock the boat then?
Novelty for the sake of novelty is not a desirable objective especially if it has a patent or latent disruptive potential. Let us not mistake motion for action.
Every change is not progress. In 2021, a new the income tax return filing portal was rolled out that took a few months to stabilize and threw up many a glitch. Don’t fix what ain’t broken.
Mercifully, Form 1 (Sahaj) has survived the onslaught of what appears to be a tinkering exercise.
The new initiative smacks of one-size-fits-all. If the CBDT wants to trap the crooks, let it spring the net for them. Let us not unfurl a dragnet to catch all and sundry indiscriminately.
Why should a salaried person with no other income save interest from savings bank account be pummeled with so many wizard questions?
—S Murlidharan is a CA by qualification, and writes on economic issues, fiscal and commercial laws. The views expressed in the article are his own.
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