Rectifying errors in tax returns

According to a Business Recorder report in the issue of 15th January, the Central Board of Revenue has launched a countrywide exercise to rectify errors in the income tax returns for the 'tax year 2003'. The report, quoting official sources, also has it that analysis of these returns pointed to two types of common errors the taxpayers had committed. One related to deposit of lower amount against the actual liability, which they themselves were found to have accurately calculated.
In the other case, the taxpayers were seen to have found no tax liability against them, thereby pointing to a visible error in the 'tax computation'.
However, the resulting anomaly in actual payment of tax by the taxpayers seems to have been traced to the gap in figures in the returns the taxpayers had filed. It will thus be noted that on this objective analysis of the situation, the possibility of deliberate attempt at tax evasion on the part of the taxpayers concerned would stand ruled out, pointing to what may be described as an understandable human error.
However, since amounts outstanding against defaulting taxpayers have to be recovered the Revenue Board, the authorities appear to have done well to adopt a lenient and, evidently, a taxpayer-friendly approach.
For the recovery of the due amount from the taxpayers, the department would send politely worded letters to the taxpayers, to help them rectify the error, and fulfil their obligation too. It is expected that the department will collect a substantial amount of tax under the exercise.
More to it, in cases where full amount due has not been deposited, the department would dispatch notices to the taxpayers for its full recovery, but will give them a chance to hear their viewpoint before taking any action against them. It has been decided that tax demand, which has been raised either to make up the deficiency or to rectify errors in the last year's returns, has to be recovered by the income tax department.
The data of 'tax year 2003' needs be checked, corrected and updated for clearance of pending refunds to the taxpayers too. The whole approach, will certainly make it an exercise in rectification, as all the returns were accepted under the Universal Self-Assessment Scheme for the 'tax year 2003.' Besides helping the department collect a large amount in a hassle-free manner, it will also help rectification of errors for accurate maintenance of data by the department.
Now that the Central Board of Revenue has been actively engaged in devising ways and means to bring the country's taxation system in line with the advanced countries, evidently from a business-friendly thrust, the new exercise will certainly be widely welcomed.