Every individual has to pay tax for her/his existence or survival. Payment of tax is the duty of every citizen of a country. The government for the development of the country utilizes this tax amount. But not all individuals are law-abiding citizens. There are some lawbreakers in every society who do not do their duty as good citizens. They do not pay their taxes on time or do not pay them at all. Earlier the government systems were not in place so it would take them very long to identify those few who have not paid their full dues of tax. But with the onset of customized software, even these government departments have become net savvy. So it is now easier for them to identify the defaulters.

A Tax Letter is a government letter written by an authorized government employee to the payee who is a defaulter. This letter is written after a careful analysis has been done on the payment history and amount due from the payee. It is written to inform the payee that tax is due from her/him or that s/he is being considered a defaulter till such time that s/he clears her/his dues to the government. In all fairness it is good to chase these defaulters because they derive all the benefits that a citizen gets but without paying for them.

But a Tax Letter can be written even to a citizen who is a law-abiding citizen. A Tax Letter can be for income tax, sales tax, road tax, property tax, etc.

DOS AND DON’T’S OF TAX LETTER

  • A Tax Letter should be written as soon as the defaulter has been identified. The purpose of the letter is not to let the payee remain a defaulter but to make an effort that s/he pays up
  • It should be directly addressed to the payee
  • Since it is a government official letter, it should be typed and not hand-written
  • It should not be a very lengthy letter. Instead it should be short and crisp
  • Simple words should be used in the letter because the payee may not be too literate to read difficult words
  • The letter should always be written by an authorized personnel of the department
  • To confirm authenticity of the letter, it should bear a letter reference number as in all government letters
  • The date should always be mentioned on the top left corner
  • The period for which the payee has been a defaulter should be clearly mentioned in the letter
  • If any previous reminders or letters had been written to the payee, copies of those should also be attached with the letter for the reference of the payee
  • The deadline by when the amount has to be paid should be clearly mentioned in the letter
  • There should always be a phone number or an email address on the letter for the payee to get in touch for any clarifications
  • The designation of the authorized signatory should always be a part of the letter

SAMPLE TAX LETTER

________________ (Name and address of payee)

_________________ (Date)

Subject: Due date for property tax payment

Dear Sir or Madam

This is with reference to property tax due on your property at ___________________ (detailed address).

The due date to pay the property tax is __________ (date) failing which a penalty of ___________ (amount) per day will be added to the total amount due. Please make a demand draft in favor of ______________ (name of department) for Rs.__________ payable at _____________ (city).

Your payment history shows no default till date and we appreciate that. We hope that this time around also you will pay the tax before the due date to avoid inconvenience.

For any clarifications you may please call ____________ (number).

Best regards,

(Name and designation of signing authority)