A Reddit user, who identifies himself as an honest taxpayer working in the Bengaluru software industry for 21 years, presumed harassment by an income tax manager after his income tax return was recovered from the meticulous exam. The user claims to have diligently produced income statements and paid taxes on salary and capital gains, to deal with a heavy penalty due to an allegedly erroneous interpretation of their common fund transactions (MF).
The taxpayer said that the assessment manager had questioned the source of their investments in MF, despite clear explanations that funds came from wage profits and long -term stock market investments. Even after submitting supporting documents – including bank statements, Zerodha’s commercial files and a large book – the agent would not have understood transactions and imposed a penalty under article 271aac (1), dealing with investments as a non -recognized income.
Article 271AAC (1) of the 1961 income tax law concerns sanctions imposed on taxpayers for underestimated income which is a matter of specific categories. The penalty under this section is compulsory and cannot be deleted by the manager of the assessor. However, taxpayers have the right to appeal against sanctions decisions to higher authorities such as the income tax commissioner (appeal) and the income tax appeal (ITAT).
Expressing frustration, the Reddit user wrote: “Each young child understands today that no one can invest in MFS online without money from an authenticated bank account recorded using PAN. It is impossible to invest even a single roupie without appropriate verification.”
The user also stressed that the officer did not examine his 21 -year -old tax payment history, and did not check how investments were made by legitimate sources. Instead, control focused on the treatment of consolidated payments – a common characteristic in Zerodha Coin, where several MF purchases are made by a single transaction – as an unexplained money.
Although the authorized taxpayer’s authorized accountant (CA) provided clear ventilation, the officer would have ignored the explanations and imposed sanctions, misinterpreting the financial files. The Reddit user also said that a virtual audience was planned, but he never received the required connection details. Despite a reproduction request, the penalty order was adopted without enabled them to present their case.
The user has questioned the equity of the tax system, where compliant taxpayers are faced with harassment while contributing to “39% of their tax wages”. They highlighted mediocre infrastructure and daily difficulties, declaring: “Everything we get are 45 -minute traffic jams just to reach the orr from my home in Bellandur, Bangalore and broken and pottolement roads.”
Frustrated by the test, the taxpayer admitted that they were now regretting their decision to stay in India, despite multiple opportunities to move abroad.
The taxpayer also claimed a refusal of an equitable opportunity to defend himself. The Redditor asked for a virtual audience, but despite the reception of an appointment email, the password to join the meeting was never sent. Even after having filed a complaint and requested a postponement, the penalty order was adopted without allowing them to present the case.
The message sparked a debate among Reddit users, many sharing similar experience of tax control and bureaucratic ineffectiveness. Some users have noted that there are an increasing number of cases where honest taxpayers face a meticulous examination while the big failing failed often remain unpunished.
