Letter to BS: I-T dept warns salaried class against filing wrong returns

This is with reference to “I-T warns salaried class against filing wrong returns” (April 19). It is surprising why salaried class has been singled out. Most of the salaried employees have straight jacketed salaries from where the employer deducts tax at source. There is no scope for evasion of tax here. It is only at the high-end spectrum with variable salaries and other income accrual where there could be a scope for evasion by way of inflated deductions. If these individuals inflate deduction amounts in their returns, they should be punished. But it should be noted the deductions claimed are within the ambit of the prevailing rules. Why not tighten up these rules leaving no scope for varied interpretation? 

The focus on scrutiny of inflated deductions in connivance with tax advisors should not only be restricted to the salaried class. Businessmen and self-employed professionals have much more scope to game the system. An Income Tax department released figures state the average tax payment made by an individual salaried tax payer was Rs76,306 in the assessment year 2016-17 as against Rs 25,753 by an individual business tax payer. It is common knowledge the average individual businessman enjoys a far more luxurious lifestyle than an average salaried individual who pays three times more income tax. The I-T department should be focusing on these business individuals from where more revenue could accrue. 

Instead of being reactive, it would be better if the I-T department moves towards plugging the loophole in the system which smart tax advisors use to tweak returns for their clients. There could be an upper cap on the amount of deductions allowed on each head of income which could also help curb the gaming of the system. 

K V Premraj  Mumbai

Letters can be mailed, faxed or e-mailed to: 

The Editor, Business Standard

Nehru House, 4 Bahadur Shah Zafar Marg 

New Delhi 110 002 

Fax: (011) 23720201  ·  E-mail: letters@bsmail.in

All letters must have a postal address and telephone number