The Budget may have extended many tax concessions to senior citizens to help them breathe easy. Yet taxes continue to give pensioners sleepless nights.

 No level field

 Mudanad Krishnan, a septuagenarian from Vashi, Navi Mumbai, brings to light what he thinks are the inequalities in the Budget announcements for seniors.

“Firstly, seniors cannot take advantage of the enhanced Section 80C deduction for NPS to save on taxes. Second, there is no level playing field between the two categories of senior citizens.

In the case of senior citizens in the 60-80 years slot, the only benefit is enhanced medical insurance premium of ₹10,000, whereas those above 80 years are allowed deduction of medical expenditure up to ₹30,000. Presently, the exemption limit for above 60 and 80 years is ₹3 lakh and ₹5 lakh, respectively. A higher slab for the latter was probably for the reason that they would spend more on medical expenses, which is now satisfied by the deduction of ₹30,000,” he analyses, pointing to the need to raise the exemption limit for those in the 60-80 years age group more generously.

In the last five-six years, the basic exemption limit for the 60-80 years age group rose by a mere ₹50,000, while for those above 80, it has doubled from ₹2.5 lakh.

Unfair demands

This apart, the real trouble for seniors arises from issues related to filing of returns. Among the most frequently heard complaints is the demand for more taxes due to TDS mismatches.

Take the case of Prema Krishnamoorthy, a senior citizen from Chennai who had a fixed deposit in a public sector bank close to her house. The Form 16A issued by the bank at the end of the year clearly showed the TDS deducted. But a notice asking for additional taxes in this regard for the year 2010-11 took her by surprise.

“For no fault of mine, TDS amounting to about ₹7,000, which was seen in Form 16A, was not reflected in my Form 26AS.

Taking the help of an auditor, I promptly wrote a letter to the assessing officer pointing out that I had already paid the required taxes and also attached a copy of Form 16A.”

But that did not put matters to rest. “I got a notice again in February 2012 saying that I have to cough up ₹7,000. My auditor said I need not pay and we could continue to fight the case. But I was apprehensive about this snowballing into a bigger issue. So, I quietly paid the amount out of my pocket, although I knew it was an unfair demand.”

Going in loops

The problem of repeat notices and wrongful demand for more taxes has been testing the patience of 65-year old Sudip Sen (name changed on request) from Kolkata. Sen, who retired as a deputy director of a professional association a few years ago, had a tax liability of ₹25,414 for the financial year 2011-12. Of this, he had already paid ₹24,000 as TDS or other advance taxes and had to pay ₹1,414 as self-assessment tax.

“My troubles started when I unfortunately paid self-assessment tax of ₹1,414 under a wrong head in the challan. About five months later, in January 2013, I received a notice claiming the same amount.

Realising the mistake, I filed a request for rectification in February 2013, giving details of payment of the claimed amount. I received a rectification order immediately, but that took into account the payment of only ₹1,414 and demanded the remaining ₹24,000, which had grown to ₹26,710 by then. And to my dismay, when I filed my returns for the following year, the refund I was expecting was adjusted against this ₹26,710. After that, I filed a rectification petition with the local assessing officer in November 2013, filed a revised return for 2011-12 and have also approached the grievance cell of the department. But the matter is still not resolved,” laments an exasperated Sen. “Doesn’t my Form 26AS show whatever I have paid for that year? Why can’t they use their judgement and close the case? I have a heart condition and am also recovering from a recent eye surgery. I stay far away from the IT office in the outskirts of the city and can’t run there every time I have a problem,” he explains, bringing out the practical difficulty.

Magnifying glass

Another painful issue faced by senior citizens seems to be scrutiny assessments. Under this, the computer systems assist in randomly picking up returns for further scrutiny, to make sure the assessee has not concealed anything. NK Raveendran, a senior citizen from Bangalore, who has worked as a finance professional in various public/private sector companies and technology MNCs, has been subject to three scrutiny assessments in the last 8-10 years.

“These assessments are predominantly based on information provided in the Annual Information Return, which require disclosure of certain high-value transactions and investments.

But very often, these kind of assessments happen after three-four years, the officials don’t link new investments made with foreclosure, redemption or switches from older ones and they seek all kinds of documents, such as bank statements, balance sheet, net worth calculation, etc. Having been a finance professional, I have a habit of preserving old records and was able to calculate my networth, but how can everyone be expected to do this?” he rightly asks.

“Thankfully, all my scrutiny assessments are done with, and not one demand for more taxes was raised from all these. Had they spent this time on a business or company assessment, they would have at least generated more revenues,” he says.

The way forward

With most cases causing unnecessary stress to seniors, Raveendran suggests that the Department should have a cell dedicated exclusively to seniors, which will help expedite closure of deserving cases. The Department can also obtain any documents needed directly from the banks and other institutions instead of making seniors run from pillar to post. Seniors need not be called to appear in person unless it is absolutely necessary, he concludes.

 

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