Various welcome steps were taken by the foregoing and the extant Government for improving compliance with the Income Tax Act (the Act) in India.

One such step is an active integration of Form 26AS w.r.t. filing of return of income and claiming the credit of the respective taxes paid. It has empowered the assessees to take charge of what rightfully belongs to them. They are now able to check as to whether the amounts deposited/deducted as tax in their name have been duly deposited/shown to their credit in Form 26AS.

However, many a times it has been seen that assesses, to whom Deductions under the Act are available, avail of such deductions without actually making the respective investments or complying with the preconditions. Such acts are committed because in most cases these claims are not verified by the Income Tax authorities.

Deductions are provided to an assessee in order to encourage certain practices at assessee’s end. Example: Insuring self and family w.r.t. any unfortunate occurrence, investing for a better future, bringing people’s savings in circulation so that it benefits the economy at large and hence its people.

Many of us at times believe that this is just a compliance exercise which, we somehow, need to complete or else we make false claims in order to get the respective deductions.

Some assessees claim deduction, among others, by showing PPF deposit wherein they haven’t made any such deposit, showing the entire school fees as Tution fees wherein they haven’t even bothered to check the actual amount of Tution fees paid on behalf of their children.

Thus, these deductions were provided for a purpose and some of those purposes are:

  1. Encourage regularity of investment in secured (PPF etc.) and low risk (ELSS etc.) avenues so that we end up creating a decent corpus in order to survive in the times of need without being dependent on anybody.
  2. Make us self-dependent in the case wherein we have encountered a medical exigency w.r.t. self or any of the family members. This is encouraged via providing deduction under section 80D of the Act on premium paid for Medical insurance.
  3. Making sure that a family is able to meet the ends in case if loss of life/any disability occurs w.r.t. its bread earner.

However, at times, mostly due to our immaturity or laziness we are unable to appreciate the facilities accorded to us by the Government.

So it would be a welcome step wherein the extant Government, just like Form 26AS, brings in a scenario wherein it’s able to verify as to whether the investments/payments claimed for deduction purposes have actually been made.

Through this Government will be able to make the citizens of this country self-dependent as people, in order to claim deductions, will actually go ahead and make the necessary investments/payments. Government will be able to give a further boost to the income as people’s savings would be mobilised, thus, bringing money in circulation. Government will also be able to increase its revenue collections as false claims will drop drastically. Above all a climate of compliance and understanding will start taking shape and eventually when the people will realise that it was for their betterment mainly then they too would spread the word among others who still remain non-compliant.

Give it a thought, it’s worth it!!!!

(Author Details- CA Sahil Jolly – Jolly & Co. Chartered Accountants, Contact: +91-9999830077, Email :

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