New Delhi: They were meant to help taxpayers prepare and file their returns online, earn revenue for the government and, in the process, make a living for themselves.
But, as the 31 July deadline for filing tax returns approaches, it hasn’t quite worked out that way.
Last year, the income-tax department trained 3,737 university graduates in preparing tax returns for individuals and small businesses in return for a commission and a fee.
The response was less than heartening, drawing 40,000 returns amounting to Rs35 crore in tax collection last year— some 0.01% of the Rs3.14 trillion the income tax department collected.
By 23 June, only 450 out of the 3,737 tax return preparers, or TRPs, filed claim forms, meant to be sent to the department online and help them earn commissions, according to Shishir Jha, commissioner of income tax and spokesman of the Central Board of Direct Taxes.
The problem, according to the preparers, began with the software for filing returns online that had been provided by the income tax authority.
“Last year I got three new taxpayers that could have earned me around Rs1,000 as commission from the department,” said Anoop Gupta, from Etah district in Uttar Pradesh, a preparer. “But the software was so slow that I had to engage a local chartered accountant for filing the returns.”
A preparer earns 3% of the tax collected from the first year’s return of a new taxpayer, 2% for the second year and 1% for the third year. For preparing the returns of existing taxpayers, a preparer earns Rs250 per client for each assessment year.
“I became a TRP because finance minister P. Chidambaram promised to expand the role of TRPs,” Gupta said. “He promised to make us the only authorized agents to issue permanent account numbers. The promise has not been kept. This year, I am more involved with my business than income tax returns,” he added.
The I-T department denied that any such promise was made by the finance minister.
“There was no promise made to authorize TRPs to issue permanent account numbers, which is being done by the department through NSDL (National Securities Depository Ltd) and UTITSL (UTI Technology Services Ltd),” Jha said. “They can, however, become agents of NSDL and UTITSL.”
While some preparers said the scheme is not generating enough income for them, others say the infrastructure, mainly computers in this case, was not financed as promised. Preparers are also unhappy about the lack of advertising support from the department.
“There have been no fresh calls from taxpayers this year for filing returns in the absence of an advertising campaign by the department,” said Sanjay Arora, a Gwalior-based preparer. Of the seven preparers trained last year in Gwalior, only two are working. “Since TRPs are not allowed to draw salary from any other source, many of my friends have left the job due to a dip in their income,” said Arora.
The department admits the claims submitted this year appear to be low in comparison with the number of returns. But it rejected the suggestion that it was because preparers were not Internet-savvy.
“Part of the training given to all TRPs is through the Internet. Therefore, this cannot be the reason for low claims filed,” said Jha.
The department was scheduled to complete training of the second batch of 5,000 preparers across the country by June-end. The training is yet to begin. The department is yet to investigate the reasons for the poor showing.