CA Umesh Sharma

CA Umesh SharmaArjuna (Fictional Character): Krishna, currently everywhere discussions are going on about the upcoming Budget. But Krishna, most of the taxpayers feel that the tax burden should be minimized or removed. They feel “One who pays tax only suffers and others who don’t pay enjoys”. While managing the financial affairs in life, why the taxpayer feels unhappy at the time of paying tax? There is a wide disparity, Government wants to levy taxes to earn revenue but people do not want to pay taxes. How to find a way out of this in Budget?

Krishna (Fictional Character): Arjuna, Govt. collects taxes and utilizes it for citizen’s security, development, growth, etc. See, like in sports, one wins while other loses similarly in life one’s grief is others reason for happiness. In same way, an expense of one is an Income of other, and hence disparity between Government and Taxpayers will always remain.

Arjuna: Krishna, Please tell some major reasons for the belief “one who pays tax only suffers” develops?

Krishna: Arjuna, some major reasons for this belief are as under:

  1. Lesser % of Taxpayer in Population of India: India is an agricultural country. Approximately out of total population of 125 crores, 70% are engaged in agricultural activities. However, tax cannot be levied on agricultural income, due to which those having income from other sources have to pay taxes. Approximately out of the balance 30% of the population i.e. 38 crores, only 3 crore people pay Income tax. Hence, when these minority taxpayers compare their financial status with non-taxpayers citizens, they develop above belief.
  2. Non availability of information about new taxpayers: The Budget contains information about tax collections made during the year, but there is no comparative information available of number of new and old taxpayers and taxes paid by them. Hence Old taxpayers feel that, only taxes are collected from them and others are not contributing to growth. That’s why the belief that “one who pays tax only suffers” develops.
  3. Stringent tax laws and hostile treatment by Tax authorities: All taxation departments are strictly inspecting taxpayers who are paying tax. Due to this, same treatment is not received by everyone and those who pay tax feel that the taxation system is burdensome and erroneous. The treatment given to patient is more taxing then taste of medicine, same is the case with taxpayers. Many multinational taxpayers feel that “Tax Terrorism” had started in India due to retrospective amendments in tax laws. Different tax laws required different compliances and increases complexity to do business. Tax payers hope that Proposed DTC and GST may simplify the tax laws.
  4. Increase in Cost of Justice and delay in it: When wrong/erroneous tax is levied, taxpayer has to go in appeal. The cost of appeal is nowadays high due to denial of Stays and other issues. Further time period is lost to get the justice. Hence many tax payers avoid going into litigation even though they are correct. Thus the belief as mentioned above increases. The speedy justice to the cases may reduce this.
  5. Relief schemes to tax defaulters and “Babaji ka thullu” to tax compilers: The Government provides amnesty schemes to tax defaulters and gives relief from penalties and fines. Recently Service tax amnesty scheme is the best example. Due to this, the tax compilers feel that tax defaulters are rewarded and relieved now and then.
  6. Deviation in object of tax collection later on: Every tax is levied with specific object or reason. Taxpayer pays taxes to full fill that objective. However even after attaining the objectives government continues to levy taxes, which is incorrect. For e.g. Toll taxes were collected for recovering expenses of construction and maintenance of roads, however even after recovering the amount, collection of toll taxes continues. Many taxes are levied in this fashion and there is deviation in object of levying tax and collection of it.
  7. Corruption percentage and spending of Govt. on different Schemes: Many businessmen know the percentage of corruption in many Govt. departments. This has created an impression that no work is done without it. Till Today, Government has started many schemes and arranged for its finance by way of taxes in the Budget. But in reality the benefit of these schemes reach to very few people. Taxpayer’s money is not utilized for development purposes properly. For e.g. the benefit of Rs.100 is reduced to Rs.10 when it reaches the ultimate beneficiary. Even former Prime Minister has expressed above feeling and was concern about it.

Arjuna: Krishna, what one should learn from this belief of “one who pays tax only suffers”.

Krishna: Arjuna, It is extremely necessary to change this belief, actually it is disbelief. For this, the Government will have to take concrete steps in upcoming Budget. If a taxpayer evades tax, he should be penalized, but the Government makes update in law with the mentality that an offence done by one person is done by all. Also, there are no incentive schemes for taxpayers paying tax correctly and regularly. Like in School, studies student is rewarded, thus other students feel motivated. In same way it should be done for regular tax payers. Further tax authorities should also note that they are also tax payers. A tax payer should note that in life, to do good deeds lot of efforts are required that’s way pay taxes for the development of country in spite of issues. Rather than discussing problems in life, one should always try to overcome it and move ahead. Hope “Good days will come down in life of Tax payers”. But worth to note that happiness is state of mind.

Dear Tax guru lovers, your comment please, as they are very valuable and precious.

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  1. khot Dheera Pundlik says:

    I will like to know… Why the government take income tax returns…. And on every thing we purchase or on every other thing tax is being taken by the government….
    If government takes income tax the don’t have any right to have any tax on other things…which will help india to develop…
    If we keep 3 lakh amount in banks then the tax will be cut…from where this law has passed….
    And if we keep it at home we will have black money…..
    Nowadays there is no black only white ….no we will have to say bring white money back..
    In this condition only poor or common people will have to suffer

  2. rakesh kumar jain says:

    I pay tax religiously well before due date. But Govt, does not pay refunds.
    Refund for my FY 2009-10 is still pending. Is it not Govt.’s duty to pay refund in time. If Govt. pays refund in time, I guess people will have more
    faith in our IT system & more people may come forward to pay tax.

  3. Mahesh says:

    I feel I am victim of IT department, since I paid all the self assessment taxes before 31st July 2014 with interest and due to connectivity problems could not file the return on 31st July 2014 but got delayed by 3 days and now I have received a notice from IT department under sec 139 (9 ) and are demanding interest till date and rectification of the return.
    Whereas a SC decision states that if the taxes due are paid and if no liability is due but the return is filed late then no interest can be charged by the IT department. Is it true that the SC decision is not to be abided by IT department?

  4. Geeta G Hiremath says:

    I am salaried assesse coming under 20% tax rate. .year before last year I lost Rs2 50,000, which was paid as Initial deposit for site..and later this amount got forfeited which is complete loss, now my question is whether there is any provision in IT Act where I can claim Deduction for this such facility is available for Income from Business. .kindly let me know that I can somehow compensate such a great amount of loss..

  5. prakasham says:

    our elected representatives make the Law – let it be Direct Taxes or Indirect Taxes. As a wise Indian one should think whether the political parties are paying the taxes to the Govt. of India. Neither the Political Parties nor the Political Leaders are paying taxes. Take into account the allowances received by each MP or MLA. How much service he owes to the Citizens. No body cares about this. At least in the next General Elections, the entire nation to vote on the button NOTA

  6. rakesh kumar jain says:

    How Govt. will listen? Most likely they do not read comments posted in all forums like
    this one? There must be an official forum where the views can be expressed by public.

  7. RiddhiSiddhi says:

    Mr. Author & all

    Don’t cry for delay in & cost of getting Justice.. Its being constitutional procedure every one has to get justice in proper way. We all are responsible to get justice in time with less cost. But ….

    Non-Legal Professionals अक्सर Long (5,10 …Years) Court Proceedings के बारे लिखते है या कहते है: पहली बात तो यह है की जनाब आप लोगो को Court Proceedings के बारेमे ज्ञान तो होता नहीं है। Court Proceedings में वादी-प्रतिवादी, एक से ज्यादा लोगोंका involvement होना, investigation, cross investigation, examination of witnesses, cross examination of witnesses करना, Other Agencies का दख़ल होना, भावनात्मकता, जात, धर्म, क्षेत्र इत्यादि विषयोंका केसेस में Natural Justice के साथ इन सब बातोंका judgement deliver करते समय संज्ञान लेना, ध्यान रखना (Lawyers द्वारा एवम Hon’ble Judges द्वारा) होता है। सिर्फ फॉर्म्स भरनेकी प्रोसेस नहीं होती है या Computer Software यहा पर यह सब चीजें नही कर सकता। क्योंकि Court Proceedings यह पूर्ण रूप से Human Talent-Analytical Skill इत्यादी बातों पे निर्भर होता है। और यह सब जस्टिस दिलानेके लिए होता है। ना की किसी को परेशान करने, किसीके फायदों के लिए (Exception are always every where).

    These contention has to be considered by every citizen before writing about Justice Process & related parties…

  8. Ca. Nitin Bharadwaj says:

    Agricultural income must be taxed. That is the jaad of the problem. Raise the limit of basic exemption to Rs.500,000 . then we will have equality as envisaged in OUR  constitution. All politicians must pay tax. Then justice will prevail.

  9. Lt Col RVR Perumal says:

    Dear Sir, Well said and written. Further the govt penalises the individual in terms of interest for not depositing Advance tax.  Our Taxing system required to be revisited for better perspective of Tax payers.

  10. V. SHRI KUMAR says:

    True, ours is an agrarian-oriented economy. But not each and every agriculturist is a small/marginal farmer. People who own more than 10 acres of land either in individual names or family members’ names are not at all taxed. In fact, as we all are aware, most of these farmers are financiers to political world; some being politicians themselves. Another law, which is most oft misused, is treatment of losses in agriculture. Tax avoiders know pretty well to own an acre or two to book losses although they make profits in their other activities, whereby they need to pay taxes. Reports of eminent people favouring agricultural taxation are gathering dust, as all political parties are “united” against this concept. India is another haven for tax evaders. You need not go to other countries for tax concessions.

  11. Speakup says:

    In which world are you living in to call Shri Krishna and Arjuna fictional characters.
    Would you please reply and not get away just posting this article!!

    1. CA Sandeep Kanoi says:

      Dear Sir, In the opinion of the Author they are Fictional Character for the limited purpose of this Article and he is not calling them Fictional Character.

  12. Ashok Kr. banik says:

    As income tax return is submitted by very less people, govt. should take steps to make it mandatory for submitting return for every individual whose earning exceeds taxable limit and violeting of the rule. penalty should be levied.

  13. lalitha hariharan says:

    tax payers are being taxed. Please answer this.

    1. A person suffers and saves money in term deposits for his future. The income saved is after paying tax. Then why interest income on deposit is taxed.
    2. after 60 any person is prone to ailments. No benefit except serious ailments like cancer you will get reimbursement from the insurer. They should be allowed medical exemption every month or the amount spent should be exempted from tax . Then the old people will not be a burden to the younger generation.

  14. JOSE MATHEW says:

    Exactly the reality you have narrated and it is glorious. Similarly in the case of TDS late filing fee u/s 234E, those who have complied the prime duty of deduction of tax is suffering with a tax terrorism penalty of Rs. 200 per day for non compliance of filing of e-TDS return in time. But on the contrary, as per amendment to section 40 a(ia) those who had not deducted TDS willfully get protected and it is quite discriminatory. Very pathetically there is no body to protest against such a tax terrorism, very very shameful situation and now we are under intellectual slavery which is very dangerous when compared to our physical slavery to Britain. In the pre- independence period we had made so many violations and such violation made us free from the notorious British Raj. Accordingly we have to violate this tax terrorism late filing fee

  15. ramani says:

    a primer on things well known! Relief lies in fundamental shifts in governance, subsidies, law / authority / justice delivery, electoral reforms, free market reforms with a strong regulator, wiring up the country for IT, massive investments in physical and subtle infrastructure and many others. Present despair is a reality, unfortunately((

  16. S PRAKASH says:

    if really the finance minister and the officers in CBDT understand the hidden high value suggestions in the article they have to implement at least few points from this.It is not Krishna told Arjuna but it is CA Umesh Sharma (Krishna) told “TAX GEETHA” to the CBDT.

  17. S PRAKASH says:

    Good point “One who pays tax only suffers and others who don’t pay enjoys”, I have raised this question to number of Commissioners who have visited Tumkur. nBut non have given answer to this point. It is a practical problem all the prompt tax payer ask “why we only should pay tax? when lacks together who are having better earning capacity and high spending do not pay even one rupee tax. The survey for new tax payers is not done by the department, just they sit in the office and if they reach their target fixed by the CBDT they are happy and not worried about the prompt tax payers and non-payers. They do not distinguish between the two.Since a decade the department is depending only on the tax payers who are in the roll of the department they have not added new tax payers since years and they are happy that the target is achieved by the old tax payers itself , then why they need new tax payers? it will increase their work.

  18. P ROY says:


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