Income Tax Return Filing in India : Couldn't We Have Some Better Ways ?

India has been evolving continuously in one field. The progress has been remarkable. It is in the area of Income Tax which comes under the purview of the Finance Ministry of the central government.

Without income no country can progress. So tax collection, that too efficient tax collection, is essential for any country to survive without begging or borrowing. It is a very tricky area in a democracy. Hence, this ministry is normally entrusted to some one who is the better among the lot in the cabinet of central ministers.

In India, the presence of the central government is during the annual budget presentation by the central finance minister. The Indian people who earn some income feels the pinch or pamper during the day when the secretive central budget is read out in the parliament !

Some decades ago, Income Tax never contributed much to the governmental income. In those days, the indirect taxes on commodities used to be the main income of the government. In those days the tax rates on incomes also used to be extremely high. Perhaps as high as 80 % or more. Who would like to earn more for paying everything to be taxed by the government ? Perhaps none. So in  those days only a few people actually declared their incomes to be taxed. Black money or money unknown to the government and outside the clutches of the taxmen became the dominant factor in the Indian economy due to this.

Slowly, the Indian tax advisers and the political leadership understood their folly. Income tax rates got considerably reduced. As of now, it is roughly anywhere between 0-38 %. Campaigns on compulsory Permanent Account Numbers (PAN) for tax payers and computerisation have widened the tax net and as of now Income Tax has become one of the major contributor to the income of the central government in India.

An annual income above $ 4100 (Rs.250,000) is taxable in India now. Women and aged people are given some extra benefits ( I do not understand the logic because every rupee matters for those who are in the lower age groups and the men who are supposedly supporting the majority families in India !)

So far the actual incomes of the majority people in India were not fully known to the government. As per the latest Income Tax information, there were only 42,800 persons in India who declared their incomes over Rs. one crore ($ 164,000) per year while the actual situation is generally felt as much higher.[See Report here ]

This is because, the actual recorded incomes are for the salaried class of people who have no opportunities for hiding their legitimate incomes. In this case, the employers are bound to deduct the tax at source and remit the tax deducted to the government account periodically. The salaried class and those earning pensions are the people who does the filing of the tax returns without fail. So far, those of this category with incomes above Rs. 500,000 ($ 8000) per year were required to file the returns before the due date every year. This year the government has made it mandatory for even those salaried people whose incomes are even lesser.

This kind of a return filing, in my opinion could be easily avoided. Thousands of useful man days are lost in India every year because the salaried class of people sit and break their heads in filing their returns for the taxes they had already paid. The income tax staff all over the country waste their time and efforts in compiling that data and sending error notices and rectification notices.

Every year, the tax authorities come up with different kinds of return forms. Every year the tax rules are changed under various schedules. Even the most educated lawyer in the country is not comfortable with the tax rules and stipulations. Imagine the situation for the 'poor' tax payers of India, who are just educated to do their own work ! Now one can imagine why Indian offices do not work properly during the days of annual tax return filing months !

This could perhaps be a typical example of penny-wise pound foolish culture that has been prevalent in India for quite some time !  Tax return filing is indeed a citizens responsibility. However, making that compulsory even for those marginal income groups whose taxes have been deducted at source is something ridiculous. At least that should be the case for all those salaried income people whose incomes actually do not go beyond 1 % of their recorded salary income for which taxes are deducted in advance. A certificate of tax deduction at source should be deemed as equivalent to a tax return in such cases.

Just imagine the unnecessary data processing load that could be avoided by just one such step ! Besides, it would free the thousands of salaried people from the worries of filing the tax return forms that are fancifully designed every time by some tech freaks or accountants without much consideration to the mind levels of the thousands of individual tax payers. Is it justified to cause metal tensions to the people who are actually paying their taxes in time ? Every time the finance ministers do declare simplifying the tax return forms. But in practise it has been observed that it has turned much complicated every time !

No doubt, originality is a strange thing in India. Copying systems and practises from developed worlds like the USA with some adaptation is quite an acceptable practise. The numerous tax return forms and the numerous taxation clauses are all perhaps due to such a thing. Sadly, what the Indian authorities fail to realise is the fact that India is not a literate state as the USA.

While bench marking with a country like the USA, it is interesting to note the logical taxation rules in that country.[ Read This !] There too, the tax rates are between 0-39 %. But these rates are divided in about 7 slabs unlike the 4 slabs that is in India. In the USA, they give much importance to the family as a head of a family is taxed less as compared to an individual. The tax rates are only 10 % for a family income up to $ 17500 per year (Rs 1 Million). Every citizen with some income has to pay the tax in the USA ( at least 10 %) and this way every earning citizen is a contributor to the national exchequer. I do not know whether all those citizens, including those paying a nominal tax are also required to file the returns like what the Indian government now propose.

The list of tax exemptions and rebates is very big in India. However, these are not for the salaried class. Who all are gaining from such exemptions is some thing to be researched. Now, even deemed incomes for salaried class (except perhaps those working for the Finance Ministry) are taxable in India. No standard deductions any more. But, a self employed person like a lawyer or a doctor or a businessman can get pretty good amounts annually on account of rebates making their net cash availability much more than a salaried person.

It is not a secret any more that many employers find loop holes in the tax rules to extent benefits to their employees on account of peculiarities in the taxation rules. However, this is only done by progressive employers and not all employers are keen to do such things. Thus, even in the employee class, differentiation naturally take place making some employees better of than some others even with their gross reported incomes appear as same.

The Indian society gets divided this way. Remember, this was what the rulers of the past adopted. Divide and rule ! There are several such things that divide the Indian society ! Who gets the advantage is only to be guessed !

Is the tax policies made for the country under some justifiable logics or is it made under whims and fancies ?

I am not sure. I am confused !

But I seriously think about this. Couldn't we do any better ? Better for the people in general and for the nation ?

[By the way it is interesting to note this: 

The IT e-filing website address for India is this: https://incometaxindiaefiling.gov.in/‎You may try reaching this site using common browsers such as the Internet Explorer or Google Chrome.

It is possible that this site may not open at all due to ' Invalid Server Certificate' error. 

I could open this usingMozilla Firefox but not with the other two. 

This only shows the lacuna in the governmental systems which are hastily implemented without proper checks] 

Aadhaar Biometric Identity of UIDAI and the Flood of Identity Operations in India !

Some time ago, the Government of India created a central organization called the Unique Identification Authority of India (UIDAI) under the leadership of a prominent Indian software technocrat inducted to the government side from the private sector. UIDAI has spent crores of rupees to collect the bio-metric data of the Indian people resident in India to create what is called a unique identity card nicknamed 'Aadhaar' for each and every individual resident of India.

It is believed that a few crores of people have been 'scanned' for getting their finger scans and eye scans and other key information by initiating a massive data collection program outsourced to private agencies. UIDAI was to make some identity cards and issue the same to the concerned individuals by sending the respective cards through post.

Unfortunately, UIDAI has not foreseen the problem of the Postal Department to distribute these cards to the respective individuals. The effort was a big failure because of the fact that the Indian Postal Services over the years have failed miserably to maintain their status as the country's official and dependable courier service ! I would write about that story later.

I do not have any idea to what would have happened to those tonnes of paper 'aadhaar' cards the UIDAI has got produced through outsourced private agencies which never reached their destinations. For example, me and my wife, though we have a firm and well known address, never got it. So is the case with scores of others who are known to me. Surprisingly, all of us got our scanning done during the same time in the same booth set up for the said purpose !

The UIDAI might have realized their folly later and then came out with another concept called the e-aadhaar. That was indeed a step commensurate with the high tech stature of the UIDAI as this time the authority got an online website operational for those who haven't got their aadhaar cards.

How to get this e-aadhaar online is explained by me in another blog [ You may view this blog here !]

If you see the various comments of the viewers under the above said blog, you would perhaps understand the difficulties faced by the public. While many viewers have got the e-aadhaar through the online system, including myself, there are thousands who have not. They have neither got the paper aadhaar nor the e-aadhaar !

At the same time perhaps more than half the population of India have not been scanned for the aadhaar biometric data base. Now, it is everybody's guess what a faulty system can do for the citizens of India !

As I have written in some of the earlier blogs elsewhere, India is undergoing an identity crisis, not only for the nation, but also for its citizens.

The Income Tax Department has the PAN card. The Election Commission of India has the Voter's Identity Card which is to be made several times as per the residential status of the citizen. The Transport Authority issues the Driving License. The External Affairs Ministry issues the Passport. The Private and public employers issue their employee I-Cards. The schools and universities do the same. Some other departments of the government concerned with food distribution issue the Ration Cards.

Then there are cards issued by the banks, the debit and credit cards. The Revenue department issues some other cards and books showing a persons land ownership. The telephone companies and the gas companies issues their cards, books, bills and the like.

The post offices issue residence certificates on a chargeable basis. They claim that they do, but their post masters need not be knowing about such a thing !

Now in India, you cannot travel in any train or plane if you do not have any card of the above said categories. Again some arrogant employee of the railways or the airline companies could create mess for any one on account of some spelling mistakes in any of the so called identity cards of India- something which could happen at any time. Luck and fortune play the most important role in India in this regard !

If you have not faced any problems, you are a fortunate Indian ! It is as simple as that !

I am at a loss to understand why the Indian authorities are so passionately fond of the Identity Cards and other cards. Imagine the confusion of keeping all these cards and books and papers even by those who have some secured and weather protected residences ! What would be the situation for those millions of Indians who do not have any such things above their heads ?

And that explains the complex nature of India as a nation. A nation of no direction, no vision, no mission.

But that in itself is another type of identity. The identity of the mixture. The identity of the south Indian 'sambar' and the north Indian ' Kichri'. The foods Indians cherish when they are sick !

Let us wait for the times when the sickness gets cured fully !

Do you have any doubt about that future possibility ? If so, it is time to think collectively !

Some Reasons Why India Has Poor Water Supply and Sanitation Infrastructure !

I have seen some municipal corporations in India taking over three decades to implement even mundane water supply projects which could have been done in one or two years time. I also find many cities and towns with no water supply and sanitation services. Regrettably many cities and towns of India also do not have any plans for making such facilities in the near future. Even progressive cities like Thiruvananthapuram, the capital of the most literate state of India, have failed in implementing and managing good waste handling and disposal facilities.

Any developed and progressive country can perhaps call itself developed when the majority of its citizens are able to get good drinking water in sufficient quantities and also when they enjoy decent sanitation and waste disposal services.

Unfortunately, India stands at a pathetic low level of development when water supply and sanitation norms are concerned.

Waste disposal facilities are virtually non existent. 

As a professional engineer with decades of experience in this area, I feel ashamed of such a pathetic situation in this country.

It is not very difficult to design and implement good water supply systems and sanitation systems linked to effective municipal effluent treatment plant systems for any cities or communities having a population of 5000 or more. So also is the case with solid waste management.  However, very few cities and communities in India have such systems.

What are the reasons for this kind of situation in India ?

Why is it that the Indian leaders and administrators do not feel ashamed of such deplorable conditions of their country ?

In my opinion, such a situation arise out of many things, all linked to each other in one way or the other.

The following are some of the main reasons as I see it:

1. Deterioration in City Management : Excepting a few large metropolitan cities, the city and municipal corporations have degraded to become play grounds of local politicians. As a result, the bureaucratic organizations that are required to assist the democratic city governments have become lethargic or non committal or ineffective to do any proper planning or city management.Often, the city administrations are headed by pliable or incompetent bureaucrats who are posted by the state administration as per political compulsions and priorities. Besides, the personnel and staff that get in to these administrative organizations of the municipalities and corporations are selected without any due consideration of their specialist experience or qualifications that they soon become vested interest groups. Specialist wings of the city administration such as the town planning, public health engineering, water supply and sewerage, public works, etc become side tracked to such an extent that their specialists and engineers no more are required to show any professional competence. It becomes all the more convenient for the incompetent political heads and bureaucratic chiefs to have such incompetent technical people as their subordinates that the former never feel the necessity to improve the competency of the latter. Soon, for any infrastructural development involving water supply, water treatment, sewage treatment, solid waste management etc the political heads and bureaucratic chiefs become the decision makers including those matters that are purely technical in nature. Such decisions eventually create nonviable or inferior schemes and projects which would either never get fully implemented or commissioned for the benefit of the people. Such technical incompetence soon creeps in to the operation and maintenance areas as well.

2. Inter departmental Conflicts: Lack of coordination among various governmental agencies and departments.

3. Lack of respect of contractual obligations. Indians are infamous for this kind of an attitude. Once contracts are placed, the Indian authorities at all levels seem to create undue problems for the contractors mostly for personal benefits. Delays of payments and works on account of such objections created by the officers and staff of the city governments often create a situation that good EPC (Engineering, Procurement, Construction) contract firms with expertise and experience in the relevant fields avoid taking up such contracts.

4. Centralized Decision Making: Indian top authorities are keen to keep all major decisions to themselves even when they are not competent to take such decisions. Delegation of powers exist only in theory and not in practice. The root cause of this situation is the eagerness to get importance for unfair gains.

5. Incompetence of vigilance personnel and authorities to judge technical issues. Often such a situation makes the technical personnel from taking firm and sound decisions for the overall good of public projects. Again, this situation arises out of the lack of vision of the law makers who create such rules and regulations without due consideration of expert opinions. In my opinion, it is not a good practice to allow non technical authorities to find fault with technical decisions and file vigilance cases based on such findings. Even when there is a prima facie technical error, it has to be based on the recommendations of an expert technical committee.

6. Lack of Respect to Engineering Expertise and Training: In India, disciplines of engineers do not carry much value once an engineer gets posted. It makes the engineers who are trained in some discipline not getting the appropriate jobs and making the particular engineering discipline becoming a non preferable one for fresh students eventually creating a shortage of trained man power in certain areas. A typical example is the shortage of sanitation engineers or environmental engineers in the Indian city administrations.

7. Isolated Academics: Indian engineering institutions and technical universities plan their engineering curricula quite arbitrarily without due research on the requirements of the potential employers and their needs. The courses are planned based on the aspirations of the youngsters who are pretty unaware of the usefulness of the courses that they are going to study.

8. Isolated Engineering Profession: Experienced engineers have practically no say in the selection and deployment of fresh engineers within their organizations in India. This function is almost entirely decided by non technical people who have no idea about the work of engineers. This creates adverse imbalances in engineering expertise within even engineering organisations. Technical groups of city administrations are no exception.

9. Incompatible Group Competence :Technical groups in India which are required to do collective engineering tasks are made up of technical personnel having incompatible capabilities and competence. The continued practice of reservations, favoritism, etc play an important role in this. The result is failure of the group to perform effectively even when there are exceptionally good individuals in the group.

10. Lack of Long term Business Opportunities: Lack of consistent opportunities for EPC firms to maintain their expertise on a long term basis. There is no guarantee of work in areas such as water and waste water engineering, solid waste management, etc from the local authorities. The allocation of budgets and funds are erratic. This causes much uncertainties for EPC firms to maintain their expert engineers and technicians on a long term basis. Much bunching of work also happens making all work to suffer of time schedules and quality . EPC entrepreneurs try to maintain their technical organizations without enough numbers of permanent experts and managing the show somehow by outsourcing or entering into temporary understandings to form consortia or similar other gimmicks making a mess of things that eventually everything proceeds without any proper direction or planning.

11. Proliferation of Textbook Experts : India now has a number of so-called environmentalists who are text book experts and have no practical experience or expertise. They copy impractical norms and quality parameters and make big noises of not achieving certain values of quality parameters with regard to environmental quality norms on water, treated effluents, land fills, air , etc. These so called experts often make things complicated and often provide much fodder for the non technical media and the public. In the developed countries, often decisions on such things are taken on the basis of best achievable technology (BAT) and best practical technology (BPT) . In India, text book experts are least concerned about practical aspects and costs involved. This compels many organizations to spend huge sums of money for practically achieving no results, especially in the areas of water treatment, effluent treatment and air pollution control.

12. Organizational Inability to Retain Expertise : Indian organizations do not allow planned development of expertise in engineering and technology. Whatever experience the engineers gain happen randomly and in much unplanned manner. Hence it is not very easy to identify and evaluate the real experience and expertise of engineers. Again this evaluation is left to the whims and fancies of non technical personnel, making many experienced engineers wasting their times without actually contributing to works where they could do it well or important engineering assignments getting in to the hands of inexperienced engineers and non technical leaders bull dozing them to commit gross errors.

13. Inconsistencies in Political Policy Making: There is no political will in India to make these services privatized allowing  reasonable charges to be levied from even the affluent class of urban citizens. There is no reason to fear that the affluent urban citizens are so selfish and ignorant that they resist such facilities that would make their lives better. However, the present political atmosphere is such that every good move by one political party is opposed by the other parties who are not in power. This kind of attitude can change only when the mind set of the politicians change and they think collectively for the citizens and their country rather than for themselves.

14. Ineffective Town Planning: Indian cities develop and grow in the most unscientific manner due to the absence of effective town planning. Very few cities have free spaces earmarked for development of infrastructural facilities for water treatment, waste water treatment, waste processing, laying of pipe lines, etc. Even after 60 years of independence and even after the whole world has progressed, the Indian authorities feel that these are important matters which require firm actions. Ministries handling urban development, housing, water, environment, etc all seem to work in different directions. Few Indian citizens are aware of the existence of such ministries or their objectives. Incidentally these ministries keep changing every now and then with different names and objectives making any sustained actions never taking place with regard to water supply, sanitation and waste disposal in urban or rural India.

15. Absence of Key Drivers to Infrastructural Projects : No one India seems to be in control of planning and execution of infrastructural projects with regard to water supply, sanitation and solid waste management for the Indian cities. It could perhaps be a good idea to notify the names of the key drivers of such projects with their responsibilities and authorities known to the public.

16. Decline in Design and Engineering Professionals: India has an acute shortage of design and engineering personnel who can formulate and plan an infrastructural project on water supply and waste water management for the cities and to do the detailed engineering works involved. As of now, India may be good in developing computer software, but it is not good in works involving conventional and core engineering due to its  expertise and capacity continuously on the decline in this area for the last many years. Serious thinking and corrective steps at the highest levels only can save India from becoming a slave to other nations in the future. One of the reasons for this shortage is the reluctance of brilliant engineers to take up this career in India because in this country being in this field of work they earn little respect now and of the prospects of being at the receiving end to be bull dozed by their not-so-brilliant colleagues who chanced to climb up the career by taking up other easier routes. No wonder why the brilliant IITians of India prefer to become IIMees by doing an unlearning of their difficult engineering- a thing perhaps never happen in a developed nation !

It is a big opportunity to prove India's capabilities first in Water Supply, Sanitation and Solid Waste Management and making India filth-less and hygienic before trying to make the missiles, bombs and the rockets using borrowed technologies. This field has enormous potential for job generation. It also has enormous potential to generate income for the government.

I know the stories of many young men from India who never got any worth while employment in India, getting good paying employment in small county water treatment and sewage treatment plants in the USA. If the US could pay over $ 5000 per month to an Indian born supervisor of a water treatment plant of a county of 5000 odd population, why can't India do it ? USA is rich, because the majority there think big. The moment the Americans think like the Indians they too are going to be doomed !

Improving the health of the citizens is good for every one. Even for those who have made vast fortunes in India and thinking of staying in alien countries for breathing well. 

[Reproduced partly from Rajan C Mathew's Blogs: View the Original Blog Here !]

Do We Need One More Blog Site to Address and Share Indian Issues ?

Dear Blog Readers !

Welcome to this new blogger site where I propose to share thoughts especially relevant to India and Indians.

Since India is a nation of diversities, complexities and controversies, there is all possibility that India related topics covering governance, society, politics, attitudes, news, contemporary issues, business, religion, medicine, education, languages, people, etc might also elicit certain degree of likes and dislikes. Yet, I propose to write and share my views about India and Indians in such a way that it does not cross the limits of general acceptability.

Very controversial topics are not to be covered here.

Though the topics are essentially India related, I may include some views and examples from other nations as well, just for comparative purposes.

I have been writing and sharing blogs about a number of topics in another blogger site to which you could jump by using the link provided at the bottom of this page. I propose to copy-paste a few blogs from that here too, perhaps with some adaptation ( only those which are India specific !)

While India specific topics would be covered here, it does not mean that only Indians are welcome to read these. My blogs are in the public domain in the world wide web and every one in this world is welcome to read and comment on those.

If you take a few minutes to give your opinions or additional information or any such things, please do so by using the comments facility at the bottom. You can comment using your Google ids or even anonymously if you so desire.

Please also consider sharing those blogs your circles. That would definitely be an encouragement for me to write !

While my writings here could have the influence of the philosophy of the great book ( about which I had told much in my other blog site) I would not be including any thing directly from that book here in this India specific blog site.

My purpose of writing these blogs is to create a bit of awareness among my readers about my great land of opportunities and diversities- a land which has been in existence from pre-historic times ! And the awareness to some extent could be about the general deterioration of values and character that has crept in the peoples of India as perceived generally.

It pains me when international organisations like the Transparency International rate my land as one of the highly corrupt nations of modern world. Something that should never had happened for a country with the traditions of vedas, rishis and ahimsa (non-violence).

I am pained by the general prevalence of impatience, greed, selfishness,  intolerance and narrow mindedness among my countrymen. I ask myself why only India remains as a nation of utter poverty and illiteracy when almost all other nations in the world in the last two three decades have improved their positions during the same period.

Why do character and competency elude Indian leadership ? I am yet to find some answer to that.

Is it because the majority Indians do not know how to chose their leaders or is it because the leaders know how to hoodwink their followers ? It could be both, I reason.

My country men and women appear to be highly religious and spiritually oriented. Yet I find them deprived of the good values that should have resulted on that count. I am wondering, why ?

Do my country men and women do some self introspection ? There is no evidence with me.

The affluent classes in this country are after imparting education of the highest standards to their wards. But I am forced to think that education for them means skills for earning money minus the values of life ! Is my thinking erroneous ?

This country's neo-historians state that it got independence from the British empire in 1947. That was a decade before I was born. There is no reason that I should doubt that history. But yet, when I read concurrent historical information from other sources, there is a strong compulsion for me to believe in the non-existence of any political conglomerate called India before 1947. Instead there were hundreds of small to large kingdoms waiting to become independent nations as the white rule decided to end their control over the land. The democratic modern Indian state is a federation of various cultures and languages knit together under a central force which is capable of exerting much physical force. Something that came into existence by more of a chance rather than by any earnest desires of the peoples !

Perhaps that explains the slow pace of progress of this nation. Opposing forces and agendas every where. Could it be the reason for the maladies that affect this country ?

Whatever be it, this nation needs to proceed with caution and care. Its people has to learn and understand their responsibilities and tasks as citizens of a modern era nation. Its leaders and managers have to be proactive to make its citizens proud of their nation.

This nation has to evolve as a prosperous country, not just for a few, but for all !

And it is my dream. My dream for my children. My dream for the coming generations that would live on this land !

Whatever I share through these pages would be with that objective in mind.

I hope my readers would be glad to give a moral support to that cause.

Best Regards.

Er.Rajan C Mathew FIE