Saturday, July 27, 2013

Income Tax e-Filing in India : Did Anyone Foresee These Problems Before Making it Mandatory ?

The finance minister of India and the central board of direct taxation authorities of India have very excellent plans for India at least in the area that is in their command- the direct taxation of the tax payers of India.              The Latest and Inexpensive Redmi 1S Mobile Launched by FlipCart

No one can perhaps find fault with their decision to force e-filing of income tax returns mandatory for those getting more than a few lakhs of rupees per annum as salaried income.

But the only problem is perhaps their ignorance about the poor quality of internet speed and coverage in this country which makes such ambitious plans not go the way they think.

In India, the majority of individual internet users use either old free versions of internet browsers such as Internet explorer version 6 or earlier or free limited versions for house hold use as downloaded from various sites or provided initially by their PC or laptop vendor. Of late, may individual house hold users use other browsers such as Google Chrome, Motzilla Firefox, etc.

In any case there would be only a minority of individual home users who are using genuine certified browser software that they had purchased by paying money. This is also true for many commercial users many of them, including government owned ones, use these browsers which are essentially unlicensed.
Of late, the software companies have come up with latest versions of these softwares with certain inbuilt mechanisms which could give them the idea about the user and know whether a particular user is using a licenced version or not.

For normal internet use they do not create any problem. But, when people use it for official or commercial purposes, these softwares start creating problems.

For example, very few people would be in a position to open the official e-filing site of the Income Tax department of India with their browsers.

If you would like to experience it yourself try opening this link by clicking it:

Many of you won't be able to do it. Some versions of the Internet Explorer (Microsoft) simply do not open it. The Google Chrome would display this message: 'Invalid Server Certification' Return back to safety.

I do not know whether this is a problem due to the browser or it is due to the problem of securtity certification of the server of the Income Tax Department of the government of India. Most likely it could be due to the latter. Because, it is the government departments in India that do not recognize the internet legal aspects and safety norms. There is a likelihood that they are using some software systems that are not with the necessary safety standards.

I and many of my friends could use the Motzilla Firefox to file the return a few weeks earlier. However, now when I try with the same browser for filing the e-return of some other, I find the above said site though opening up initially returns a message which tells that I am using an old version of the browser and I should use instead use some other latest versions ( it specifies the versions and the makes of the softwares) The site simply becomes non cooperative after that.

Another problem which came to my notice is the way the site is designed. If a person has to register for e-filing he or she should have a valid e-mail id. But the funny thing is that this government IT site would not allow any one to enter an e-mail id if it has certain special characters such as the hyphen (-). Ridiculous, is n't it.

While filing the numerous columns in the site for entering data, this site is highly user unfriendly.

It will not allow any one to copy - paste common data. You have to enter data every time with care. If you are not good in data entry into computers you are likely to make gross errors.

The governement of India and the IT department's software designers think that every one in India who get over 5 L salary are employed in the software development companies ! Perhaps, they are right ! That is the general perception in India.

Fortunately, the site provides some relief to the individual tax payers. They can take the help of certified tax filing service providers ! For the time being you may not find the breed of such people in India any where.

This e-filing system has started on an experimental basis last year for those getting over 10 Lakhs per year as salary. That time the system was downloading a predesigned form, filling it up, then coverting it to another form called the xml form (after conversion the individuals cannot see what the said software created as the xml file. There are umpteen examples where the xml so created was with gross errors of which the tax payers came to know only after an year when the Income Tax department started e-mailing them with orders for recovery and the like. Event the functioning of these softwares were not so reliable and were prone to error creation without the person ever knowing it)

Another problem the individuals faced was the total absence of help menu. What help menu being provided are where it is not so required. For serious helps like the meaning of the clauses of the IT rules, there is no help at all. Remember, this is not at all difficult to be provided in the IT site and if so, it would have been a gesture of transparency. But it seems the governement and the IT officials are not interested in transparency.

Last year, the individual after uploading the created xml file was required to print the acknowledgement file (called the IT-V form by the taxmen). But this file would not open if you do not know the in built pass word.

Unless you are very knowledgeable to read and understand the fine legal english language, you are not going to know what is the password required to open it. Incidentally, this password is your date of birth written in ddmmyyyy form without the usual slash (/) Had you accidentally entered a wrong number while entering your return form, your IT-V would never open for getting it printed.

Then, comes the next problem. You should have a high quality laser or inkjet printer for printing your IT-V. Dot matrix printers are a strict no-no. How many persons in India have these high quality printers in their homes and office ? But the government assumes that if you get over 10 L salary you should have these in your office or home ! Many employees of PSUs and government departments and even private employees do not have such facilities in their offices. The government should have done a survey initially or they should have made and order to make these mandatory facilities for all employees getting more than 10 Lakh annual salary !

You should not ask what would happen to those people who work in remote areas, mines and such other places where internet facility and computer peripherals and accessories do not exist for all practical purposes.

Then comes the next problem. Even if you had printed your IT-V as specified, you are required to sign it and post it to the IT departments central e-processing facility at Bangaluru. You should only post it by ordinary post. No courier business ! Whether, the Indian Postal department is efficient to deliver all these signed documents back to Bangaluru from all over India is another question. (We know what had happened with the aadhaar cards !)

Even for this year (AY 2013-14) e-filing for some can be direct online. There are problems and perhaps no one in this country could solve those. You are required to get IT-V printed and posted as was done last year. If your signed form do not reach the central processing people, your IT return would not be taken for processing. You may not get back your refunds.

As far as refunds are concerned, it seems the IT department people had been instructed not to do so. Because now every person is going to get demand notices and not refunds. Demand notices with hefty penal interests and fines for no fault of theirs. Because, now the government has linked your bank accounts with your PAN and all the interest accrual information is known through what is now called the 26-AS form. The banks have taken the 10% from those 3.5 % to 8.5 % interest your balances have gained and have remitted it to the IT department. But that is not the end. Once you have got more than 10 L as salary, you owe another 23 % tax to be given on those peanut interests. If you have not paid it, then the IT is waiting for penalizing you later. The more the delay, the more the government of India is to gain by way of penalties and penal interests.

So, now comes the game plan. A faulty IT return system is in place. Even if you honestly want to pay your taxes and file you returns, you cannot perhaps do it properly. The system would not allow you to do it. And the government's system failure is not admissible as an excuse. Because, after all government is the one who wields the lathi, or the power. In a lathi wielding governmental system, citizens have no rights !

The government is not bothered if you do not have any job tomorrow and you no longer earns the 10 L. The government of India is not bothered whether you worked in a PSU or private sector where there is no pension for surviving your after job life. They would not even allow you to get even the simple 3.5 % interest from your bank account. They will tax it with out any sympathy ! Neither they would think of implementing any practical social security system as that is with the progressive nations of the world.

Because of all these, even those Indians who get more than 10 L a year as salary, much better than lakhs of their other fellow Indians, could not live happily in this country. That is why they are eagerly trying to send their children to become citizens of USA, Canada, Australia and such other progressive nations. Regrettably that is what most of the political leaders of India who are responsible for making ridiculous rules and laws are also doing !

It is like burning your home and running away to take shelter in your neighbour' home !

Is this country ever escape from these kind of ridiculous taxation rules and such other things which make life in India a horror for law abiding citizens ?


  1. E-filing creates an audit trail too. It is great.

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  3. Hi Rajan,

    I recommend you try ClearTax - - its a website for much simpler tax filing experience than the official website. It works on all three browsers very well. You don't need to deal with any xml files etc. It is one click e-filing. Do try and give us feedback.

    1. I just had a cursory look at the site. I do not mind paying for the services as this site offers. I have yet to try its efficacy. But one thing I notice missing in this site. The site do not talk about itself and there is no method of an official contact facility to clear any doubts of those like me who would use this facility. For example, if I had some previous issues to be settled with the IT department, would this site be of any help?

  4. I agree with you, most of this type of cases happens in India.

    "In any case there would be only a minority of individual home users who are using genuine certified browser softwares that they had purchased by paying money."

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  6. Yet another year for income tax return filing is approaching and another budget by a new government is also expected soon. But nothing is going to change much because, the officials organization that is essentially responsible to effect changes is the same!

  7. Budget of 2014 declared as usual today. No mention about making improvements in the online IT return filing systems. It is futile to expect that the IT officials would do it of their own. And the Finance Minister would not have any first hand experience either.

    The tax return filing for salaried people are to be done by this month end. Me and many of my colleagues have been trying to do it with no success. This year they have introduced another complexity. The IT dept is now asking for extra e-mail id and extra mobile number from the people. If you do not have these, you cannot proceed even after you have logged in with your ID and PW. Moreover, there is another hitch for those people like me who have given the second mobile number and second e-mail id. For verification they want the respective PINs that are told as being sent to the new mobile number and the new email id. The mobile PIN is received but the email PIN is not arriving even after you try all the known efforts. Without both these PINs you cannot proceed.
    Can any one think of some system more ridiculous than this? You simply cannot proceed. And you do not know what problems would be there ahead if you happen to cross this hurdle!

  8. same this is happening with me. For the last two days, i have already received n times of mobile PINs but the email! Numbers of resend pressed but still the email PIN is elusive. Please update if any solution has been found. thanks

    1. These are errors caused by software programs. It is common knowledge that the government departments cannot go for the best systems due to the procedural problems of public procurement. They have to make compromises on quality and costs. That invariably causes problems like this. But the worst part is that all these create problems to the public because the government rules and laws are blind and cannot give any solace to any one who wants to follow these rules.
      I have also found a few other problems this year. These are faced by me and a number of my colleagues.
      1. The xml file cannot be uploaded. When you try to upload it some error message appears. While the downloaded excel files (ITR-1 and ITR-2) have many check systems till one completes it to create the xml file it is simply a frustration and nonsense that it cannot be uploaded. I had wasted 3 days of my precious time on this. Finally I went for the quick filing of ITR-1 online which some how I could do after so many trials.
      If you are not computer savvy, you are going to make serious errors for sure. Perhaps the people who have made these software think that the whole of IT payers are computer geeks! Or they are perhaps under the impression that only Information Technology (IT) fellows pay Income Tax (IT)! Or those having incomes above 5L ( those who are mandated for compulsory IT returns) are all computer experts!
      Unfortunately, the top end decision makers of the government understand pretty nothing about the complexities of the computer world and are compelled to believe the what the so called low end experts advise!

    2. The other problem is the poor band width of the internet systems in India in most of the cities, towns and rural areas other than perhaps the metro cities. This poor internet connectivity and band width is not at all conducive for any IT administration to be implemented under haste on a pan India basis. For the last few days, the official IT return website does not even open up in many parts of the country where actual internet speed is only a few KBs. It is a pity. This is where the political leadership should intervene to review the whole system for the benefit of the people at large instead of blindly believing the bureaucracy for every thing!
      These problems may not be faced by people of the metros where all modern communication systems get implemented. But experience of the metro people should not be the yardstick for making decisions on an all India basis!

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  10. Hi Rajan,
    Hat's off for this critical article. I'm a techie involved in all areas of IT. Based on my observation of the site and your great article. I see this whole mess in the following reasons:
    1. The designers/ engineers/ creators are not visionaries. They are doing what they were told just to do. Example : Mess in MCA site (around 6 months), mess etc.
    2. Security - The application is developed in old version and can't be upgraded to new versions (because the engineers take few years to the same). Microsoft, Oracle (Java) or other software companies always push the new updates to our systems. The server side certificate is self-signed and the department expects us to procure through only third parties, even though the self-declaration should be sufficient.
    3. Huge database - Every department collects intelligence. Just imagine the number of tax payer email ids and phone numbers, approximately 1.2 billion equals to 0.12 billion unique email ids and mobile numbers each.
    Huge numbers to track but the big brother wants to watch from air (mobile) as well as web (email). Also just imagine the big data centers of google, facebook etc, where every piece of data is collated!
    Would like to provide a suggestion to valuable readers of your blog to overcome this problem:
    Step 1: Download the excel / java utility from the site, fill it, check and validate, generate xml file etc - complete this process. Usually java utility should not bother about email id or mobile number, for filing the return.
    Step 2: Visit efiling site and click on forgot password link.
    Step 3: Select one of the options in last ack number + bank a/c or answers to security questions etc. And you'll be able to login.
    Step 4: Play around the site as you wish. File your return or do any other things and can logout after your activity.
    Caution : This is valid for only one time. Another time, you need to repeat Steps 2 to 4. However, please remember that your passwords are being added to the database (can any one of Income Tax server, or of the company managing these systems, google, facebook or third party web robot engine) continuously. So plan a medium security password (never ever use complex passwords for one time use) of 8 characters with 2 - 4 capitals 2-4 numbers and 1 wild character. Also never use this password for any other transaction or on any site.
    Best wishes.

    1. Let us hope that the concerned govt departments would get techie bureaucrats to replace the present IAS generalists in future- something the new govt is apparently thinking of. In such an event, perhaps the IT engineers might get some patient hearing and some workable directives!

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