It currently takes up to 18 months to settle a refund claim, estimates
I-T department
The Central Board of Direct Taxes has promised to settle tax refund
claims within 30 days of filing if taxpayers file their returns
electronically. The move seeks to address excessive delays in
processing claims and check corruption and frauds in the refund
process.
E-filing of returns, launched in 2006, is mandatory for companies but
optional for individual taxpayers.
“We want taxpayers to file electronically as that helps in faster
processing of refunds,” Sudhir Chandra, chairman of the Central Board
of Direct Taxes, told reporters. “The whole idea is that small
taxpayers should not face any hardship in their interface with the
department.”
According to the Income-Tax Department’s own estimate, it takes
between 6 months and 18 months to settle a refund claim if the tax
return has been filed manually. But the Comptroller and Auditor
General says it takes at least 10 months from when taxpayers file
their return to when they may actually see the refund. Experts say by
encouraging e-filing, the department would not only make the refund
process swift but also reduce its own work load as verification of
manual returns is a tedious process.
“E-filing ensures that taxpayers’ information about income, taxes and
refunds is uploaded in the tax system instantly and tax computations
are processed on a real-time basis,” said Vikas Vasal, executive
director with KPMG.
Officials said there is an urgent need to give a push to efiling of
return as its level has stagnated at about a quarter of all returns
filed.
• 78,000 crore
was the total income-tax refund in 2010-11—up 93% since 2007-08
• 91.56 lakh
•
individual taxpayers filed online returns in 2010-11. The figure was
just 1.6 lakh four years ago
• 6-18 months
I-T Department’s estimated waiting period for refunds. According to
CAG, it takes 10 months for taxpayers to get back their money
E-Filing Must to Meet Rising Refund Claims
E-filing has also become necessary in view of the rising refund
claims. The government paid . 78,000 crore of tax refunds in 2010-11
as against . 57,100 crore in the previous fiscal. The income-tax
department has been trying to make the refund process faster and
efficient by using technology.
“A refund banker scheme is already in place in the whole of country to
ensure taxpayers get refunds well in time,” said an income-tax
department official. Income-tax authorities send data to State Bank of
India, which in turn issues refunds directly to taxpayers under the
refund banker scheme. “We issued the highest ever refunds in 2010-11,”
said Chandra, who had instructed his officials to clear all pending
refund claims before March 31.
This will ensure a clean slate for the department when the Direct
Taxes Code comes into effect from next financial year.
Chandra said the CBDT will notify the guidelines for small salaried
taxpayers by June, which will exempt taxpayers with an annual income
of up to Rs 5 lakh from filing tax returns if they do not have any
refund claims.
Such taxpayers will not be required to file returns even if they have
a small interest income. “Any step to help taxpayers would help
increase compliance levels,” he said. Chandra said the strategy to
have a taxpayerfriendly system has paid off with the department
collecting . 4.46 lakh crore in 2010-11.
I-T department
The Central Board of Direct Taxes has promised to settle tax refund
claims within 30 days of filing if taxpayers file their returns
electronically. The move seeks to address excessive delays in
processing claims and check corruption and frauds in the refund
process.
E-filing of returns, launched in 2006, is mandatory for companies but
optional for individual taxpayers.
“We want taxpayers to file electronically as that helps in faster
processing of refunds,” Sudhir Chandra, chairman of the Central Board
of Direct Taxes, told reporters. “The whole idea is that small
taxpayers should not face any hardship in their interface with the
department.”
According to the Income-Tax Department’s own estimate, it takes
between 6 months and 18 months to settle a refund claim if the tax
return has been filed manually. But the Comptroller and Auditor
General says it takes at least 10 months from when taxpayers file
their return to when they may actually see the refund. Experts say by
encouraging e-filing, the department would not only make the refund
process swift but also reduce its own work load as verification of
manual returns is a tedious process.
“E-filing ensures that taxpayers’ information about income, taxes and
refunds is uploaded in the tax system instantly and tax computations
are processed on a real-time basis,” said Vikas Vasal, executive
director with KPMG.
Officials said there is an urgent need to give a push to efiling of
return as its level has stagnated at about a quarter of all returns
filed.
• 78,000 crore
was the total income-tax refund in 2010-11—up 93% since 2007-08
• 91.56 lakh
•
individual taxpayers filed online returns in 2010-11. The figure was
just 1.6 lakh four years ago
• 6-18 months
I-T Department’s estimated waiting period for refunds. According to
CAG, it takes 10 months for taxpayers to get back their money
E-Filing Must to Meet Rising Refund Claims
E-filing has also become necessary in view of the rising refund
claims. The government paid . 78,000 crore of tax refunds in 2010-11
as against . 57,100 crore in the previous fiscal. The income-tax
department has been trying to make the refund process faster and
efficient by using technology.
“A refund banker scheme is already in place in the whole of country to
ensure taxpayers get refunds well in time,” said an income-tax
department official. Income-tax authorities send data to State Bank of
India, which in turn issues refunds directly to taxpayers under the
refund banker scheme. “We issued the highest ever refunds in 2010-11,”
said Chandra, who had instructed his officials to clear all pending
refund claims before March 31.
This will ensure a clean slate for the department when the Direct
Taxes Code comes into effect from next financial year.
Chandra said the CBDT will notify the guidelines for small salaried
taxpayers by June, which will exempt taxpayers with an annual income
of up to Rs 5 lakh from filing tax returns if they do not have any
refund claims.
Such taxpayers will not be required to file returns even if they have
a small interest income. “Any step to help taxpayers would help
increase compliance levels,” he said. Chandra said the strategy to
have a taxpayerfriendly system has paid off with the department
collecting . 4.46 lakh crore in 2010-11.
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