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`Cheque-in-the- mail' time in US
March, 28th 2007

Vastly different from what is generally observed in India, the American taxpayer, by and large, confidently looks forward to a significant amount as refund from Federal as well as State governments. This is an annual feature, occurring quite fittingly at the commencement of the summer recess. Even as the deadline for filing income-tax returns approaches, many start dreaming of the holiday outing in anticipation of the `cheque-in-the mail', which would serve as a timely supplement to their vacation budget provision.

Refund bonanza

Thanks to the relatively simple income-tax laws in the US, free from twists and ambiguities, individual assessees are able to file tax forms by themselves. And, hence, they can estimate fairly accurately the likely refund. In this context, the example of the Oregon State refund order five years back can be cited. A large number of taxpayers of this state got a real windfall when refunds from around $500 to as much as $2000 were declared. This was, indeed, like `manna from the Heavens' _ a dream `cheque-in-the-mail'.

Around May each year, visions of an exciting tour to chosen spots or enjoyment of a long vacation at some distant place are so intensely stirred up that very few choose to stay home or resist the temptation of a break from their professional engagements. In fact, a wake-up call seems to arouse a sudden activity all around as soon as signs of an early refund are seen.

The tourist industry is well aware of the peculiar American way. Though many are rich they do not spend recklessly but look for a worthy return for every dollar spent. It is perplexing, however, how such a substantial government refund can be possible when returns, invariably, are submitted after proper scrutiny. The answer, apparently, lies in the fact that both Federal and State constitutions make refund mandatory whenever a surplus budget gets through the legislature; accordingly, the benefit has to be passed on to the tax-paying citizen. No doubt, there is much sense and fiscal wisdom in the policy since what appears like a generous gesture of the government actually turns out as an invitation to spending, thereby contributing to the nation's economy.

The Contrast

In India, however, the scene on the income-tax front is far from being so rosy. Much to the taxpayer's discomfiture, the laws and their interpretation are becoming increasingly complex necessitating the assistance of an expert practitioner. The honest citizen, who meticulously arranges for the documenting regularly, year after tear, hardly receives a favourable letter of approval from the Department nor any indication of a likely refund.

It is also not uncommon to see even in a clear case of superfluous tax payment, which should normally attract repayment forthwith, further processing remaining long neglected. Thus, there can be no chance for a "cheque-in-the-mail" either within reasonable time or within the realm of possibility. Consequently, there can be no anticipation, too, of a prompt government payment or thoughts of an enjoyable vacation plan. It is all, unfortunately, a one-sided affair. The disappointed taxpayer, who may occasionally scan the records of tax returns in the personal file, may see only melancholy testimonials of unrequited refund dues!

A.V. Swaminathan
(The author is a freelance writer based in Portland, Oregon, US)

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