Here, read this example on how the Assessing officer interpreted the section 54F and put a restriction on tax exemptions. The tax payer had to fight it out in high court for a seemingly straight forward issue. The real problem here is lack of clarity in income tax rules.

http://www.moneycontrol.com/news/tax/joint-ownershiphouse-va...

Have you tried to work out capital gains for NRIs ever? It's a quagmire. Try the forums at r2iclubforums.com and you'll see the same question being asked again and again. Why? Because tax rules are designed to be difficult for common man to interpret clearly.

It would be humorous if it wasn't so disheartening.

Milton Friedman explains tax code complexity brilliantly here:

http://youtu.be/TruCIPy79w8

I've been thinking about this recently too. In Australia the government is looking into using IBM Watson to automatically make administrative decisions, e.g. assess applications for immigrant visas.

I can foresee a future where legislation becomes ever more complex and people defer to Watson as the source of truth as there will be nobody left in the public service who needs to know the actual text of the law.

Fun times ahead.

Nice. I promise we're telling the truth. ;) The tax code changes a lot from year to year. Even if we had the tax resources to implement prior years (and the cost/benefit made sense), the CRA doesn't retroactively certify products.

I wish there was an easy, silver bullet answer for people who are behind on their taxes, but it really depends on each person's situation.

The better solution is to radically simplify the Income Tax Act. This would make the system easier for everyone and ultimately make products like ours redundant. It's the right outcome and one we'd like to see one day. Until we get there, we fill a critical gap. Free CRA software won't fix the problem and—I'd argue—would be a huge step backwards.

>>I fail to see why complexity is a necessary result of increasing tax revenues.

Because increasing tax base also means increasing the sources which you can tax. In case of India, nearly all business men don't pay taxes. There is a lot of money exchanged through corruption at all levels, there is money exchanged through gifts, dowry etc etc.

Which is why the biggest reforms pending in India currently is to get everyone to have a bank account, so that they can be paid through a bank instead of handing out cash directly. Once the necessary infrastructure is in place(Bank accounts, connectivity etc), you can start reducing the supply of paper money and have people deal in electronic means. You can increase your tax base and cut a great deal of unaccounted transactions and tax them appropriately. You can also cut corruption since a transaction implies a source and receiver, who need to explain what they are doing when a transaction of money is taking place.

I agree that a lot of them don't make much income but it is basically a cash economy and many self earners don't report it. I mean if you go there and see the price of things and what people are buying, you know that have to be making more than RS. 200,000. The average BATA shoe store had products costing more than I paid in Target here and I was seeing brisk sales.

I didn't say that. I said cheating on taxes is a national pastime. And that only 2 - 3% pay taxes. Two different assertions in the same general subject domain. I apologize if my choice of words led you to conclude I was saying 98 - 97% are cheating: that was not my intention, and if you re-examine my comment I think you will understand.

The article you reference basically says that of those who owe taxes the only people who don't cheat are the few who work for large corporations who handle the filing of taxes for them.