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karira

Senior citizens and refund

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karira

Q & A column in hindu.com on 7 July 2008:

The Hindu : Business / Tax Forum : Senior citizens and refund

 

Senior citizens and refund

 

It is well-known that refunds from the IT Department take inordinately long time extending to several months usually after a follow-up and reminder. The Minister of State for Finance had stated in 2007 that ‘there have been instructions to issue refund within four months’. One does not, therefore, understand the inability to comply with these orders. True, belated refunds carry interest in law, subject to such refund being in excess of 10 per cent of tax payable, but this is a poor consolation, even if such interest is received after inordinate delay. Dignity Dialogue, a Mumbai publication, in its October 2007 issue featured an interesting article by a leading chartered accountant on his recourse to the Right to Information Act, 2005 (RTI), whereby he obtained all his refunds pending for six years within a month or so of his application under this Act. The format and the procedure are well described. He ends by stating that “the RTI is the most powerful Act, the like of which has never been witnessed before”. There is a provision under Sec. 195(3) for the assessing officer to prescribe a lower TDS. Rule 29B prescribes Form 15D for such application for authorisation from the assessing officer. But then, the IT Department is not geared for prompt attention for issue of such certification. Further, Instruction No. 8 of 2006 dated October 31, 2006, from the Central Board of Direct Taxes cautions “indiscriminate” issue of such certificates with the further requirement of administrative approval from the Joint Commissioner. All these cumbersome procedures render it difficult for the assessees to get such certificates in time. Having exhibited a soft corner for senior citizens, the Finance Minister should now go a step further and take into consideration the above hurdles and difficulties, abolish TDS for senior citizens altogether or reduce it substantially. Most of them being honest taxpayers, the loss of revenue on its account will be negligible.

 

This letter is received from K. P. Mahalingam of Chennai. It is true that in spite of its sincere attempts, the Income-tax Department has not been able to ensure prompt issue of refunds, while any delay in payment of tax by the assessee is visited with punitive action. Wherever there is a mismatch between the statements furnished by the deductor and the credit claimed by the deductee, sorting out the discrepancy leads to further delay.

 

Some of the charges were that some centres have a separate counter for senior citizens, so as to attend to their refund claims even more promptly, but not followed in other centres.

 

The reader’s suggestion for recourse to Right to Information Act, 2005, is not clear.

 

How this would help an individual to get a refund. But complaints to the Joint Commissioner or Commissioner of Income-tax may help in some cases. A lady refundee of Chennai got back her long standing refunds by staging a dharna in the morning to get the refund on the same day. Such a solution, if it is a solution, may not be necessary after the creation of Ombudsman. But before a complaint is made to the Ombudsman, the assessee should lodge a complaint to the next senior officer and only when there is no response from him also, a valid application can be filed with the Ombudsman.

 

This is likely to be effective because the Ombudsman has powers to inflict pecuniary liability on the persons responsible for the delay, besides placing a possible hurdle in the career prospect of erring officers.

 

The reader’s suggestion for abolishing TDS for all senior citizens is probably too tall, since the affluent senior citizens may far outnumber deserving senior citizens.

 

S. RAJARATNAM

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