Computers Make Life More Taxing in India

pb-120229-job-da.photoblog900While internet slowdown affected the whole world last week, India was largely unaffected. Services of the government-run BSNL were hit in some southern states but private broadband service providers were not affected at all. In any case, India ranks 112th in the global ranking of Broadband speed with an average broadband speed of 4Mbps. So, for most Indians speed is not a major issue, rather the bigger irritant for them is human error.

However, as  the role of technology increases in our life, the impact of a minute mistake gets magnified. In our daily lives it could be something as simple as a wrong amount in the grocery bill or incorrect age on the driving licence. Or it could be something as bizarre as what the British media reported about NHS statistics in April 2012. According to NHS statistics, nearly 20,000 male patients in England needed midwifery services between 2009 and 2010. Over the same period 17,000 men utilised obstetric services, something only pregnant women need, and another 8,000 consulted a gynaecologist. This medical miracle was performed by data entry operators feeding wrong codes for medical services accessed.

“Computerisation is supposed to be panacea for many ills. But what we forget is that the computers are dependent on humans, from hardware to software to data entry and commands that it executes. The problem is greater in countries such as India where the process of computerisation is a recent phenomenon and to make matters worse the government officials are not too computer savvy.”

 

The global community will empathise with the angst even more when the culprit is the income tax (IT) department or IRS alias the enemy number one of hardworking salary earners the world-over. If Vodafone and Nokia thought the taxman is out to make their life miserable by trying to wring out millions in taxes, they should give a thought to a common Indian’s plight. At least in the case of these multinationals the tax department is only demanding tax. In case of resident Indians, the income tax department merrily withheld their refunds and bullied them.

In India, tax is deducted at source (TDS) against many types of income, it could be banks deducting tax at source against interest on fixed deposits, or companies deducting tax at source from an employee’s salary.  Often tax payers are denied TDS credit because of a mismatch between the TDS claimed by them in their IT returns and the amount uploaded by the authority deducting the tax. In such cases the mistake was committed at the time of entering the data by the authority deducting the tax. The tax department presumed the taxpayers to be guilty of misrepresentation and withheld their refunds.

Nearly 2.3 million taxpayers were affected.

A Public Interest Litigation in the Delhi High Court came to the taxpayers rescue. The Delhi High Court told the tax authorities not to adjust refunds due against demands raised by the tax department under any circumstances, without prior communication without first listening to the taxpayers’ side.

The tax department accepted that it had wrongly demanded Rs 2.33 trillion (around $43 billion)

The Delhi High Court also ruled, “Whether computerisation and central processing of Income Tax returns is a boon or a bane is rather simple to answer, as benefits of computerisation easily outweigh and outscore any argument to the contrary. Computerisation does away with human or manual element and frailties attached and ensures transparency besides being quick and foolproof. Alas, it is a human and frailties which have resulted in the present Public Interest Litigation.”

A human intervention saved many from paying for another human error but it is also a reminder to the limitations of technology and dangers of blindly trusting computers. The tax department has not put in place a system to alert it if there was a human mistake affecting such a large number of people. As the famous American TV anchor Dan Rather said, “To err is human but to really foul up requires a computer.”

 

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